FOREX-Trade hopes buttress dollar; loonie lifts as Trudeau clings to power

* Trade optimism bolsters dollar and riskier currencies
* Canadian dollar rises as Trudeau clings to power
* Pound waits for Brexit developments
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Westbrook
HONG KONG, Oct 22 (Reuters) - Hopes the United States and
China were making progress to resolve their trade dispute
supported the dollar and trade-exposed Asian currencies on
Tuesday, while the Canadian dollar rose as the ruling Liberal
Party looked to have won a national election.
The volatile pound GBP= inched 0.2% higher but stayed a
touch below a 5-1/2-month high at $1.2980, with the Brexit
project in disarray but traders looking to another crucial
parliamentary vote on Tuesday to determine the next step.
China's Vice Foreign Minister Le Yucheng said progress was
being made in discussions with the United States and that while
both sides respected each other, no problem was beyond
resolution. That followed overnight comments from U.S. President Donald
Trump, who said work toward ending the trade dispute was going
well, while White House adviser Larry Kudlow said tariffs
scheduled for December could be withdrawn if progress is made.
"There's been no fresh reason to query the broadly positive
mood after the meeting in Washington," said Westpac FX
strategist Sean Callow, adding that optimism around a Brexit
breakthrough further reinforced the improved sentiment.
The dollar was marginally stronger against the Japanese yen
JPY= , hitting a high for the week of 108.72 per dollar.
It lifted from an overnight two-month low on the euro EUR=
to steady at $1.1149 and was a shade weaker against a basket of
currencies .DXY at 97.312. The trade-exposed Korean won
KRW=KFTC hit 1,169.4 per dollar, its highest since July 5.
The New Zealand NZD= dollar was the biggest gainer in
Asian hours, rising 0.3% to a five-week high of $0.6424 as short
sellers pared positions. The Australian dollar AUD=D3 also hit
a five-week peak of $0.6883 though moves were slight and it kept
below resistance around $0.6895. The Canadian dollar - the best performing G10 currency this
year - hit a three-month high of 1.3071 per dollar as Prime
Minister Justin Trudeau looked on track to retain power in a
close-run election. His ruling liberals will form a minority government, the
Canadian Broadcasting Corp projected, as results rolled in.
The pound awaits Brexit developments to determine its fate.
With just over a week before Britain is due to leave the
European Union, Boris Johnson's push to re-run a parliamentary
vote he lost on the weekend was rejected.
But he has resolved to press on with seeking to pass
Brexit-related laws in parliament on Tuesday, with their
progress to determine the timeline.
"While markets haven't seen fit to reverse last week's
optimism that saw sterling smartly higher they aren't yet
prepared to take the pound up to the next level," said National
Australia Bank Head of FX Strategy Ray Attrill.