* U.S. dollar clipped by falling bond yields
* Aussie gains to one-week high with lockdown easing
* Investors cling to trade progress before U.S. jobs data
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds details, new analyst quote, chart, latest prices)
LONDON, May 8 (Reuters) - The dollar struggled and
currencies linked to global trade rose on Friday, boosted by
news that U.S. and Chinese negotiators had agreed to strengthen
cooperation over a trade deal and as more governments slowly
reopened their economies.
Investors' appetite for risk was strong as traders looked
set to ignore upcoming U.S. unemployment data that is likely to
show the American economy losing more jobs than at any time
since the Great Depression. Top U.S. and Chinese trade representatives discussed their
Phase 1 trade deal on Friday with China saying they agreed to
improve the atmosphere for its implementation and the United
States saying both sides expected obligations to be met.
The discussion in a telephone call came amid escalating
tension between the countries, exacerbated by U.S. criticism of
China's handling of the novel coronavirus outbreak.
The Australian dollar, which is closely correlated with
sentiment towards China and the global economy, rose 0.3% to
$0.6514 AUD=D3 after earlier hitting a one-week high.
Emerging-market currencies climbed. China's offshore yuan
rose 0.1% to 7.087 yuan per dollar CNH=EBS .
Australia's dollar was also boosted after the government
announced it would ease social distancing restrictions
implemented to slow the spread of the coronavirus in a
three-step process, with the aim of removing all curbs by
July. Some analysts, however, were nervous about the Aussie.
Commerzbank analyst Thu Lan Nguyen said it remained unclear
how deep "the collapse of the economy" in Australia would be and
when there would be a recovery.
"The uncertainty thus remains high and the Aussie
vulnerable," she said.
The U.S. dollar struggled for direction. It has been
undermined by a further hit to its yield attraction as U.S.
money markets priced in a small chance of negative interest
rates next year.
"The possibility of negative rates is modestly bearish for
the dollar, given limited market pricing to date and ongoing
concerns about the US 'debasing' the dollar," wrote Ebrahim
Rahbari, chief G10 FX strategist at Citi.
But he added forceful and aggressive U.S. stimulus was
likely to boost the recovery in the United States and pull in
capital flows, supporting the dollar.
The dollar's index against a basket of six other major
currencies was last down 0.1% at 99.758 =USD .
The euro recovered earlier losses and was 0.1% higher at
$1.0839 EUR= , moving away from Thursday's near two-week low of
$1.07665.
The single currency has been hurt by a German court ruling
that could jeopardise the European Central Bank's bond-buying
scheme, and the euro is down more than 1% on the week.
Sterling edged higher in thin trading, with Britain on a
public holiday to commemorate the 75th anniversary of the end of
World War Two on the European continent. The pound rose 0.1% to
$1.2376 GBP=D3 .
Against the yen, the dollar rose 0.1% to 106.35 yen JPY= ,
above a seven-week low of 105.985 touched on Wednesday.
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