FOREX-Dollar stable with eased trade tensions

(Recasts, new throughout; changes dateline, previous LONDON)
By Kate Duguid
NEW YORK, Aug 29 (Reuters) - The U.S. dollar was modestly
higher on Thursday as news Washington and Beijing were
discussing 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 hopes for progress
hinge 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 go into effect on Sept. 1.
Thursday saw a slight bid for riskier assets, sending
safe-havens such as the Japanese yen JPY= and Swiss franc
CHF= lower and 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 0.20% to 98.406.
U.S. President Donald Trump on Friday said he would heap an
additional duty of 5% on about $550 billion in targeted Chinese
goods. The move came hours after China had unveiled retaliatory
tariffs on $75-billion worth of U.S. goods.
"It looks like it's headed towards 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 0.31% weaker to
106.44, but was on track for a more than 2% rise against the
dollar for the month of August.
The dollar was little moved by news Thursday 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 0.16%
lower to $1.2189, approaching a January 2017 low below $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.