* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, Jan 15 (Reuters) - The euro climbed to a one-week
high against the U.S. dollar on Wednesday as investors grew
cautiously optimistic about the outlook for the single currency
before the signing of a U.S.-China trade deal.
While the formal agreement will signal an end to months of
tit-for-tat tariff hikes between the world's two biggest
economies that have hurt global growth, investors were cautious
about buying riskier currencies broadly across the board.
"Markets are getting optimistic that the trade agreement
will be a catalyst for further gains in currencies but the devil
is in the details," said Thu Lan Nguyen, a FX strategist at
Commerzbank based in Frankfurt.
While major currencies spent most of the early London
session pinned in tiny ranges, the euro EUR=EBS edged 0.2%
higher at $1.1148, its highest level since Jan. 9.
One trader said the euro's rise was also due to buying by a
sovereign wealth fund.
The euro's rise dragged the dollar lower with the greenback
slipping 0.1% to 97.28.
Still, some investors don't think the formal agreement will
end the trade dispute.
"I don't think the market is fully convinced about a closure
on the trade conflict front as the issue has caused a lot of
damage to the world economy," said Neil Mellor, a senior FX
strategist at BNY Mellon in London.
U.S. Treasury Secretary Steven Mnuchin said existing tariffs
on Chinese goods would stay, pending further talks. U.S. President Donald Trump is slated to sign the Phase 1
trade agreement with Chinese Vice Premier Liu He at the White
House at 1630 GMT.
SWISS FRANC GAINS STALL
The Swiss franc reversed most of its earlier gains against
the euro EURCHF=EBS with the currency trading flat at 1.0764
francs per euro.
The franc had hit its strongest level against the euro in
almost three years on Tuesday after the United States added
Switzerland to its watchlist of currency manipulators.
Analysts said the inclusion could discourage the Swiss
National Bank (SNB) from intervening to try to limit further
appreciation of the franc, although the Swiss finance ministry
said it would have no immediate consequences.
Elsewhere, the Swedish crown weakened against the greenback
after latest inflation in Sweden held at 1.7% in December,
supporting the central bank's forecast that rates would remain
unchanged for the foreseeable future after it raised rates a
quarter-point, to zero percent, at its most recent meeting.
The Swedish crown SEK=D3 weakened a third of a percent at
9.46 crowns per dollar.
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