FOREX-Dollar up vs yen as mild 'risk on' sentiment supports

* Dollar/yen rises; Aussie, kiwi supported
* Liquidity thin due to holidays

(Updates to U.S. afternoon trading)
By Saqib Iqbal Ahmed
NEW YORK, Dec 26 (Reuters) - The dollar rose to a near
two-week high against the Japanese yen on Thursday as optimism
around easing trade tensions between the United States and China
sapped demand for safe-haven currencies, even as the
holiday-thinned trading limited large moves in the FX market.
Beijing said on Wednesday it is in close touch with
Washington on a trade deal signing ceremony, a day after U.S.
President Donald Trump said he and Chinese President Xi Jinping
will have a ceremony to sign the recently struck agreement.

"Risk is moderately 'on' today on Trump's comment that a
trade agreement is 'done,'" said John Doyle, vice president for
dealing and trading at Tempus Inc in Washington.
"On a usual day, this might just be a blip, but because of
the thin conditions, safe-havens like the JPY are a touch weaker
and the New Zealand and Australian dollars are up on hopes of a
deal," Doyle said.
Against the Japanese yen, which tends to benefit during
geopolitical or financial stress as Japan is the world's biggest
creditor nation, the dollar rose 0.26% to 109.63 JPY= .
The offshore yuan was near flat on the day against the U.S.
currency at 6.9911 yuan per dollar CNH= .
Trade-sensitive currencies were stronger. The Australian
dollar was 0.38% higher against the greenback, while the New
Zealand dollar was up 0.57%.
With global currency markets in holiday mood following
Christmas Day on Wednesday and with several centers still closed
on Thursday, overall trading activity was subdued.
"Overall, it is so quiet you can hear crickets. Most of the
western world remains closed and liquidity is very thin," Doyle
said.
The dollar index .DXY , which measures the greenback
against six other major currencies, was 0.13% lower at 97.523.
Data on Thursday showed the number of Americans filing
applications for unemployment benefits fell last week in a sign
of ongoing labor market strength. The Canadian dollar CAD= was trading 0.4% higher against
the greenback at 1.3104 to the U.S. dollar, or 76.29 U.S. cents.
Thursday's rise helped the loonie reclaim ground lost earlier
this week after data showed Canada's economy unexpectedly shrank
0.1% in October.
Sterling traded at $1.3004 GBP= , up a bit from levels
before the Christmas holiday though still way below its Dec. 13
peak of $1.3514.

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Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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