FOREX-Dollar slips against euro, pound on trade talk optimism

(New throughout)
By Kate Duguid
NEW YORK, Nov 15 (Reuters) - The dollar was lower on Friday
afternoon as some optimism for the ongoing trade talks with
China buoyed trade-linked currencies like the euro and the
British pound.
U.S.-China negotiations continued on Friday as both sides
sought to hammer out a "phase one" trade pact. U.S. Commerce
Secretary Wilbur Ross said progress was being made on the
agreement's details, which helped lift trade-exposed currencies
at the expense of safe-haven assets such as the Japanese yen.
Ross, in an interview on Fox Business Network, said there
was a very high probability the United States would reach a
final agreement on a phase one trade deal with China, but would
not say whether he expected a deal to be reached before U.S.
tariffs on Chinese goods are set to go into effect on Dec. 15.
The dollar fell 0.28% against the euro EUR= and 0.18%
against the British pound GBP= , at $1.105 and $1.290
respectively. It rose 0.41% versus the yen JPY= , last at
108.81, after the safe-haven currency had gained this week as
political unrest in Hong Kong and trade uncertainty reduced
appetite for risk. The Swiss franc also weakened 0.21% versus
the dollar CHF= .
Bleak Chinese data earlier in the week was still bolstering
hopes for a deal, some analysts argued.
"The belief is that perhaps, even though the numbers in the
United States are barely expansionary ... the fact that China is
slowing down means that there is perhaps economic leverage on
the U.S. side and that China will sign on to whatever," said
Juan Perez, senior foreign exchange trader and strategist at
Tempus Inc.
On Friday, the Commerce Department reported that U.S. retail
sales rebounded in October, but consumers cut back on purchases
of big-ticket household items and clothing, raising questions
about the consumer strength currently underpinning the U.S.
economy. That may have also contributed to the rise in the euro and
the pound.
"When we were looking at second-quarter numbers for Europe
and the United Kingdom, those numbers were very worrisome, but
now that we're looking at the third-quarter numbers, their
progress has been a little bit better and their pace has been at
expectation or beyond, whereas the United States has actually
slowed down," said Perez.
"The dollar is finally today reacting to those numbers and
saying the economic pace of the United States is not that
great."