* U.S.-China relations worsen
* Risk-off mood; yen up; Aussie down
* Quiet day expected due to U.S. holiday
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Elizabeth Howcroft
LONDON, Nov 28 (Reuters) - The dollar was little changed in
early London trading on Thursday as a mild overnight risk-off
move, sparked by the United States and China clashing over Hong
Kong, subsided.
After the U.S. passed legislation backing pro-democracy
protesters in Hong Kong, China warned that it would take "firm
counter-measures" if the U.S. continued to interfere in Hong
Kong, saying that the legislation was "doomed to fail".
The dollar index .DXY was last down less than 0.1%,
trading within narrow ranges, while the Japanese yen - a
perceived safe haven - was up around 0.2% versus the dollar
JPY=EBS .
The Swiss franc was up around 0.1% versus the dollar
CHF=EBS .
Heightened discord between the United States and China risks
jeopardising negotiations around the "phase one" trade deal - a
proposed preliminary deal to end the tit-for-tat tariff war
between the world's two largest economies.
"The moves have been quite modest because we're still
waiting to see what China's response is - what they've said so
far is quite vague," said Adam Cole, chief currency strategist
at RBC Capital Markets.
"They've not gone so far as to say explicitly that this
threatens the phase one trade deal, which is clearly what
markets are worrying about, and for that reason the reaction so
far has been quite mild," he said.
The offshore yuan was down 0.2% versus the dollar, still
trading within the week's ranges.
The trade-exposed Australian dollar was also down versus the
U.S. dollar AUD=D3 , with losses due to the risk-off mood
compounded by weak domestic data. Record-low volatility and the United States' Thanksgiving
holiday mean traders are expecting a quiet day in markets.
Euro zone consumer confidence data for November is due at
1000 GMT and German CPI data for November is due at 1300 GMT.
Spanish pricing data held no surprises and did not move the
market. RBC's Cole said the hurdle was quite high for such data to
move markets.