* Risk currencies rally after Trump postpones tariffs
* Dollar at six-week peak vs yen, yuan jumps
* Euro slides ahead of ECB meeting
By Tom Westbrook
SINGAPORE, Sept 12 (Reuters) - The dollar rose to a six-week
high against the safe-haven yen on Thursday after an exchange of
olive branches between Washington and Beijing on trade stoked
investors' appetite for risk.
Export-driven Asian currencies from Taiwan to Australia
rallied on the buoyant mood as the world's two largest economies
each granted concessions in their heated tariff dispute.
The improved sentiment comes in an otherwise cautious week
in foreign exchange, as investors await a key European Central
Bank meeting later on Thursday, at which policymakers are
expected to ease policy to support flagging growth.
China on Wednesday exempted a basket of U.S. goods from its
tariffs, while U.S. President Donald Trump said in a tweet he
would delay a scheduled tariff hike by two weeks in October.
"The nascent thaw in U.S. and China trade relations appears
to be gathering momentum," said Jeffrey Halley, senior market
analyst for Asia Pacific at brokerage OANDA in Singapore, who
added a warning that it was unlikely to last.
"Just as the presidential tweet on tariffs this morning has
injected more momentum...we are only one social media posting
away from a thoroughly unpredictable President turning sentiment
on its head," he said.
The ebbing hostilities supported broader "risk-on" trading.
Asian currencies climbed and stocks rose. Safety assets such as
bonds and the yen were sold.
The yen JPY=EBS dropped 0.5% against a rising Australian
dollar AUD=D3 and hit 108.16 against the greenback, its
weakest since Aug. 1. The Aussie hit a six-week high and the
Chinese yuan CNH= rose 0.4% to a three-week high of 7.0855
against the dollar.
The Taiwan dollar had its best day in a month, rising 0.5%
to 30.948 per U.S. dollar. The South Korean won KRW= stood at
1183.08 per dollar, its strongest since the end of July.
Outside of Asia, expectations for ECB easing this week have
weighed on the euro. The single currency EUR=EBS has shed 3.5%
since June and fell to a one-week low of $1.0983 overnight. It
was steady at $1.1013 by mid-session in Asia.
With growth slowing, the ECB has all but promised more
support for the economy in one of the most closely watched
meetings in years. The ECB is almost certain to cut rates, promise to keep
rates low for longer and provide banks relief from the side
effects of negative rates. However, new asset purchases, priced
in by markets, are not a done deal with some conservative
policymakers opposing the move.
"Market reaction will likely hinge on the confirmation of a
rate cut," said David de Garis, a director of economics and
markets at National Australia Bank in London.
"The real kicker though will not be whether QE is
re-started, but crucially, whether it leaves markets feeling the
ECB is running out of room, or hamstrung by internal
opposition," he said. "What markets would not want to hear is
during the press conference evidence of a disagreement."
Sterling also dipped after a Scottish court ruled on
Wednesday that Prime Minister Boris Johnson's suspension of the
British Parliament was unlawful, prompting immediate calls for
lawmakers to return to work as the government and Parliament
battle over the future of Brexit. The British pound GBP=D3 fell as much as 0.4% to $1.2313
overnight, and hovered around $1.2330 in Asian hours.