FOREX-Trade hopes lift dollar, rate cut forecast hobbles Aussie

* Trump says U.S.-China deal close
* Dollar climbs on yen, euro, pound
* Aussie heads lower after rate-cut forecast
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Hideyuki Sano and Tom Westbrook
TOKYO/SINGAPORE, Nov 27 (Reuters) - The dollar posted modest
gains on Wednesday, as traders looked ahead to a possible
outcome to drawn out U.S.-China trade talks, while a forecast
for monetary policy easing knocked the Aussie.
Against the yen, the dollar traded at 109.12 yen JPY= , off
a two-week high of 109.205 hit on Tuesday. The greenback had
found support on signs Washington and Beijing were moving closer
to signing a deal to end their 16-month trade spat.
The U.S. currency rose slightly against the euro EUR= and
British pound GBP= , last fetching $1.1012 per euro and $1.2853
per pound - both levels little changed this week.
The Australian dollar AUD= fell 0.2% to $0.6774. Trade is
slowing ahead of the Thanksgiving holiday on Thursday in the
U.S.
"The market is tired of playing headline ping pong with
respect to trade," said Ray Attrill, head of FX strategy at
National Australia Bank in Sydney.
"The equity market still seems to want to push on and
believe optimistically that a trade deal is going to be done,
but I think the FX market and the bond market have given up
playing that game."
U.S. President Donald Trump said overnight that Washington
was in the "final throes" of work on a deal to defuse the trade
war, after top negotiators from the two countries spoke by
telephone on Tuesday.
But he also underscored Washington's support for protesters
in Hong Kong, a potential sore point with China.
"Judging from Trump's comments, an agreement will have to
wait at least until the weekend," said Kyosuke Suzuki, director
of forex at Societe Generale in Tokyo.
If both sides cannot reach an agreement soon, the next
important date to watch is Dec. 15, when Washington is scheduled
to impose even more tariffs on Chinese goods.
The tit-for-tat protectionism has already harmed the global
economy and hit manufacturing hard.
Profits at China's industrial firms shrank at their fastest
pace in eight months in October, official data showed on
Wednesday, underscoring slowing momentum in the world's
second-largest economy. China's yuan CNY= was steady, since the weakness also
strengthens the case for deeper monetary easing. It last traded
at 7.0291 per greenback.
In Australia, a forecast from Westpac Bank Chief Economist
Bill Evans saying he expected two central bank interest rate
cuts and quantitative easing (QE) to be introduced next year
sent the Aussie 15 ticks lower.
The Reserve Bank of Australia's governor, Philip Lowe, had
said on Tuesday he did not expect to have to use QE, but that it
would become an option if rates fell to 0.25% from the current
0.75%. "That is a clear signal to us that the RBA will be prepared
to cut the cash rate down to 0.25%," said Evans.

(Editing by Sam Holmes)