FOREX-Sterling shines on Brexit hopes, yen eases on trade optimism

* Sterling up 2% Thursday after Irish PM raises Brexit hopes
* Yen down, yuan up on U.S., China trade talks
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Hideyuki Sano
TOKYO, Oct 11 (Reuters) - Hopes of progress in U.S.-China
trade talks and optimistic comments from Europe on Brexit pushed
back the safe-haven yen and lifted the British pound and euro
early on Friday.
Sterling was the biggest mover overnight, jumping 2% to a
two-week high versus the dollar and posting its largest daily
percentage gain in seven months on hopes of a Brexit resolution.
Irish Prime Minister Leo Varadkar said on Thursday a Brexit
deal could be clinched by the end of October to allow the United
Kingdom to leave the European Union in an orderly fashion, after
what he called a very positive meeting with Boris Johnson.
Ireland is a major factor in the prolonged Brexit impasse.
Sterling last traded at $1.2431 GBP=D4 , having risen up to
$1.2469 on Thursday.
Against the euro, the pound also rose to two-week highs of
0.8831 pound to the euro EURGBP=D4 on Thursday and last stood
at 0.8858.
The euro also gained against the dollar, rising to $1.1007
EUR= . It had climbed as high as $1.1034 in U.S. trade on
Thursday, its strongest in almost three weeks.
That helped to send the dollar index =USD to 98.709, a low
last seen on Sept. 25.
Also undermining the dollar, data showed on Thursday U.S.
consumer prices were unchanged in September and underlying
inflation retreated, supporting expectations the Federal Reserve
will cut interest rates in October. The yen eased to 107.92 yen to the dollar JPY= , having
shed about 0.45% the previous day.
Top U.S. and Chinese negotiators wrapped up a first day of
trade talks in more than two months on Thursday, as business
groups expressed optimism the two sides might be able to ease a
trade war and delay a U.S. tariff hike scheduled for next
week. U.S. President Donald Trump told reporters that his team had
a "very, very good negotiation with China," and reiterated his
plans to meet with Liu at the White House on Friday.
"Prospect of an interim deal were also boosted overnight
following reports that President Trump was planning to meet Vice
Premier Liu He on Friday," Rodrigo Catril, senior FX strategist
at National Australia Bank in Sydney, said in a report.
The Chinese yuan was also buoyed, with offshore yuan traded
at 7.105 yuan per dollar CNH= , having hit a three-week high of
7.0990 to the dollar the previous day.