FOREX-Dollar trims gains as trade optimism fades, Aussie near lows post RBA cut

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* RBA expected cuts rates to a record low
* Traders looking for clues on additional RBA cuts
* Greenback pares gains as caution on trade sets in

(Adds RBA rate cut, yuan, analyst's comments)
TOKYO, July 2 (Reuters) - The dollar gave up gains on
Tuesday as investors curbed earlier enthusiasm about U.S.-China
trade progress while the Australian currency barely budged from
recent lows after a central bank rate cut decision offered few
clues about future easing.
The yuan also shed its early rise to trade lower on the day
after U.S. President Donald Trump said any deal with China would
need to be somewhat tilted in favour of the United States,
suggesting negotiations may not proceed smoothly.
The U.S. dollar index against a basket of six major
currencies earlier rose to its highest in a week but retreated
as doubt set in about the resumption of U.S.-China efforts to
resolve their trade war.
Market focus now shifts to Reserve Bank of Australia
Governor Philip Lowe, who speaks to business leaders in the
northern Australian city of Darwin at 0930 GMT, which could
provide clues on how much further interest rates could fall.
"The tone from the RBA was not that pessimistic, which gives
the impression they are somewhat reluctant to cut rates
further," said Yukio Ishizuki, foreign exchange strategist at
Daiwa Securities in Tokyo.
"Short positions in the Aussie were already so heavy. Now
we're in a situation where the main risk is for the Aussie to be
bought back."
The Australian dollar AUD=D4 was up 0.3% at $0.6983 on
Tuesday after slumping 0.9% on Monday, its biggest decline since
April 24.
The RBA lowered interest rates by 25 basis points to a
record low of 1.00%, matching economists' expectations. In a
statement the central said it would lower rates again "if
needed," a phrase some analysts took to mean an additional rate
cut is less certain than before.
The U.S. dollar index .DXY was little changed at 96.790 on
Tuesday having posted its biggest increase since March 7 on
Monday on hopes Beijing and Washington were making headway in
their trade negotiations.
The United States and China have already imposed tariffs of
up to 25% on hundreds of billions of dollars of each other's
goods in a dispute about China's trade practices that has lasted
nearly a year.
The drawn out trade war has slowed global growth and pushed
many central banks to cut interest rates to support their
economies.
The offshore yuan CNH= gave up early gains to trade around
0.2% lower at 6.8690 versus the dollar, on course for its
biggest daily decline in a week.
The global investor spotlight will move to U.S. non-farm
payrolls data due on Friday, which economists expect to have
risen by 160,000 in June, compared with a 75,000 increase in
May.
However, analysts expect the dollar will struggle to make
substantial gains given expectations the Federal Reserve will
cut rates due to low inflation and worries about the U.S.-China
trade war.
"It would be a mistake to view the rise in the dollar on
Monday as the beginning of a broad-based rally," said Junichi
Ishikawa, senior foreign exchange strategist at IG Securities in
Tokyo.
"Treasury yields are capped around 2%, because there are
still expectations for Fed rate cuts."
The euro EUR=EBS briefly fell to an eight-day low of
$1.1275 before trading little changed at $1.1289. The common
currency fell 0.7% on Monday, its biggest-one day decline since
March as disappointing economic data triggered a tumble in bond
yields and boosted expectations for a European Central Bank rate
cut.