FOREX-Dollar lifted by U.S.-China trade optimism

(Recasts, new throughout)
By Kate Duguid
NEW YORK, Aug 29 (Reuters) - The U.S. dollar was stronger
Thursday as news that Washington and Beijing were discussing
renewing their negotiations in September eased anxieties about
the ongoing trade war.
The world's two largest economies are in talks about the
next round of face-to-face meetings, but the possibility of
progress hinges on whether Washington can create favorable
conditions, China's commerce minister said on Thursday. He also
expressed hope the United States would cancel the additional
tariffs set to take effect on Sept. 1.
A bid for riskier assets sent safe-havens such as the
Japanese yen JPY= and Swiss franc CHF= lower and U.S.
Treasury bond yields higher. The dollar index .DXY , which
measures the currency against a basket of six rivals, has held
up despite a dramatic escalation in tariffs last week and was
last up 0.28% to 98.488.
Against the euro EUR= , the dollar was 0.23% stronger to
$1.1053, nearing a one-month high.
U.S. President Donald Trump said last Friday he would place
an additional duty of 5% on about $550 billion of targeted
Chinese goods. The move came hours after China had unveiled new
tariffs on $75 billion worth of U.S. goods. China thus far has
not said it will retaliate against Trump's new tariffs.
"It looks like it's headed toward a quiet lack of agreement,
as opposed to Twitter wars. With that quiet lack of agreement,
it is probably enough to allow emerging currencies to stabilize,
as well as some of the commodity currencies like CAD and
Aussie," said Gregory Anderson, global head of foreign exchange
strategy at BMO Capital Markets.
Against the greenback JPY= , the yen was 0.49% weaker at
106.63, but was on track for a 2% rise against the dollar for
the month of August.
The dollar was little moved by news that the U.S. economy
slowed slightly more than expected in the second quarter,
despite the strongest growth in consumer spending in 4-1/2
years. "The numbers were pretty close to on the screws, so in the
major exchange rates we didn't see much of a reaction," Anderson
said.
Sterling remained in the spotlight after Prime Minister
Boris Johnson's plan to suspend parliament raised the odds of a
no-deal Brexit. GBP/ The British currency GBP= edged 0.23%
lower to $1.2181, approaching a January 2017 low of $1.2015.
"Brexit is a big deal. We've got a big week next week on
that issue. And I think that increasingly it will be the factor
that drives markets, as opposed to U.S.-China trade spat
headlines," said Anderson.