FOREX-Dollar rebounds as ebbing trade deal optimism hurts risk appetite

* Dollar rallies vs euro, weaker vs yen
* Sterling falls as EU, Britain pursue Brexit deal
* Asian and U.S. holidays to limit mkt volumes
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tommy Wilkes
LONDON, Oct 14 (Reuters) - The dollar rose on Monday as
investors headed into safer assets after they became more
cautious that progress was being made towards a comprehensive
U.S.-China trade deal.
The dollar fell last week, and dropped sharply on Friday, as
optimism that a trade deal could be reached, together with a
restarting of Brexit talks between the European Union and
Britain, pushed investors into riskier assets.
U.S. President Donald Trump said on Friday that Washington
and Beijing had reached a 'Phase 1' trade deal. But on Monday the U.S. currency regained its poise as
investors turned slightly cautious.
Analysts said the partial deal between the world's two
largest economies appeared to lack substance with limited
progress on structural issues such as technology transfers.
The euro fell 0.2% to $1.1014 EUR=EBS , while against a
basket of currencies the dollar rose 0.2%, with its index at
98.517 .DXY .
The greenback fell against the Japanese yen, however. The
yen is considered a safe-haven currency and its quick bounce
from a 2-1/2 month low touched on Friday underlined investors'
nervousness about the trade deal optimism on Monday.
Manuel Oliveri, an analyst at Credit Agricole, said the
announcements so far did not amount to "a broad-based trade
deal" that would justify the markets' optimism last week.
With Tokyo's market closed for a public holiday and a
holiday in the United States for Columbus Day, trading volumes
would likely remain lighter than usual.
There was also little in the way of new and important
economic data due on Monday.
The yen was last up 0.2% at 108.25 JPY=EBS .
Emerging market currencies and those closely linked to broad
risk sentiment, such as the Australian dollar and Swedish crown,
had rallied at the end of last week.
On Monday most were lower, with the Aussie losing 0.3% to
$0.6770 AUD=D3 .
The Swedish crown weakened 0.3% against the euro to 10.847
EURSEK=D3 .
"While the tentative US-China mini deal is non-negative for
markets (and in part exceeded the previously low market
expectations) it in our view does not offer a durable solution
to the trade conflict," ING strategists said in a research note.
Sterling fell in early London trading, shedding more than
0.5% against both the dollar and euro GBP=D3 EURGBP=D3 ,
after Britain and the EU stressed over the weekend that there
was a long way to go before they could agree a Brexit deal.
The pound had surged to more than three-month highs last
week after London and Brussels announced "intense" negotiations
to try and agree a Brexit deal before Oct. 31.