* Investors pin hopes on Deutsche negotiating lower US fine
* UK PM May says Brexit process to begin by March 2017
* Friday's U.S. nonfarm payrolls report in focus
TOKYO, Oct 3 Sterling hit seven-week lows on
Monday after Britain set a March deadline to begin its exit from
the European Union, while the dollar firmed as fears about
Deutshe Bank receded and investors looked to this week's U.S.
British Prime Minister Theresa May said that she would
trigger the process for the UK to leave the EU by the end of
May told the ruling Conservative party's annual conference
on Sunday that she was determined to move on with the process
and win the "right deal".
Sterling was down 0.4 percent at $1.2941 after it
earlier touched $1.2902, its lowest level since Aug. 16.
"The sterling low was hit this morning in very low
liquidity, and there's still two years to go before anything
happens," said Mitsuo Imaizumi, chief currency strategist at
Daiwa Securities in Tokyo.
"There is still plenty of time for investors to buy back the
Risk sentiment benefited from news that Deutsche Bank was
attempting to negotiate a much smaller fine with the U.S.
Department of Justice, though no formal settlement has been
The DOJ fined Germany's largest bank $14 billion earlier in
September for what it alleged were sales of toxic
"I think the Deutsche headline risk is still there. It's not
finished yet, with many things yet to be revealed," said Kaneo
Ogino, director at foreign exchange research firm Global-info Co
in Tokyo. "Cross your fingers that this rangebound trade
The euro edged down 0.1 percent to $1.1234 remained
well above Friday's low of $1.1153 hit before hopes of a reduced
Deutsche settlement pulled it higher.
The dollar index, which tracks the greenback against a
basket of six major rivals, inched 0.1 percent higher to 95.541
, off Friday's more than one-week high of 95.960 but above
Friday's session low of 95.342.
The dollar was last down slightly at 101.38 yen, but
was still doggedly holding above last week's low of 100.085 yen,
its weakest since Aug. 26.
"The dollar looks firm against the yen after the 100 yen
level was repeatedly tested. However, the upside may be blocked
near 102.00 yen," wrote Marc Chandler, global head of currency
strategy at Brown Brothers Harriman.
The Bank of Japan's quarterly tankan survey of business
sentiment, released early on Monday, showed that Japan's large
manufacturers expect the dollar to average 107.92 yen for the
fiscal year through March 2017.
Speculators boosted net longs on the U.S. dollar to their
highest in six weeks in the week ended Sept. 27, according to
Friday's data from the Commodity Futures Trading Commission and
The value of the dollar's net long position rose to $9.7
billion from $6.6 billion previously, the data showed.
A key focus for the dollar this week will be the U.S.
nonfarm payrolls report on Friday, which could cement or dash
expectations that the U.S. Federal Reserve is on track to raise
interest rates by the end of this year.
The Australian dollar edged down 0.2 percent to $0.7647
, ahead of a monthly policy decision on Tuesday by the
Reserve Bank of Australia (RBA).
Australia's central bank is widely expected to hold its cash
rate at a record low of 1.5 percent, a Reuters poll of 57
economists found on Friday, following cuts in August and May.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam
and Kim Coghill)