FOREX-Dollar near one-month highs before Fed minutes; pound dives

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee
LONDON, May 22 (Reuters) - The dollar held near a one-month
high on Wednesday as trade tensions between the world's two
biggest economies remained high before Fed minutes that may give
more clues on what prompted U.S. policymakers to strike a
broadly neutral stance this month.
Officials in both countries dug in their heels as tensions
intensified since Washington last week blacklisted Chinese
telecom equipment company Huawei Technologies Co Ltd HWT.UL , a
move that has rattled global markets.
China must prepare for difficult times as the international
situation is increasingly complex, President Xi Jinping said in
comments carried by state media on Wednesday. "Everyone is digging in for a long fight," Brown Brothers
Harriman strategists said in a note.
Against a basket of its rivals, the dollar .DXY was
broadly steady at 98.032 and just shy of a one-month high of
98.134, its highest since late April.
While risky assets heaved a sigh of relief after the United
States eased trade restrictions on Huawei, the lack of a
significant breakthrough has kept investors on edge.
"We are still sceptical over a long-lasting recovery," said
Charalambos Pissouros, a senior markets analyst at JFD group.
"Before we get confident on that front, we would like to see
concrete signs that both the US and China are truly willing find
common ground."
Markets also waited for the Fed minutes, which are expected
to give insights into the May 1 meeting when officials decided
to keep interest rates steady and signalled little appetite to
adjust them any time soon, taking note of strong jobs growth.
The Japanese yen JPY= and the Swiss franc CHF= remained
firm against the dollar with both currencies set to gain nearly
1 percent so far this month against the greenback signalling
investors were broadly dialing back on risky assets.
However, MUFG Bank's chief currency strategist Minori Uchida
said he expected demand for the U.S. currency to remain strong
on a need for dollar funding among emerging markets and on
investor cautiousness due to the Sino-U.S. trade dispute.
"Even if yields fall, that's not likely to put a big dent in
the dollar's rise," he said.
Sterling was the only notable loser in the European session
with the British currency GBP=D3 falling 0.4% to a fresh
four-month low against the dollar at $1.2651. GBP/ Political uncertainty in Britain deepened as Prime Minister
Theresa May's final attempt to seal a Brexit deal failed to win
over opposition lawmakers and many in her own party.
Elsewhere in the foreign exchange market, the euro EUR=EBS
was steady at $1.1162 before a speech by European Central Bank
chief Mario Draghi in Frankfurt.