* G7 meeting kicks off event-risk filled week
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, June 8 (Reuters) - The dollar held near a three-week low on Friday against its rivals, while relatively high-yielding currencies such as the Australian dollar came under selling pressure as investors cut risky bets before an event-packed week.
A likely hike in U.S. interest rates, a European Central Bank policy meeting, a likely acrimonious G7 meeting that kicks off in Quebec later in the day and a Brexit bill vote starting next week all pose risks for currency traders. For a related factbox, see
“Markets are understandably nervous before a week filled with events, starting with the G7 meeting, and safe-haven assets are in demand,” said Christin Tuxen, a currency strategist at Danske Bank.
Trade issues between the United States and its major trade partners will be in the spotlight, with the Mexican peso and the Canadian dollar already coming under some selling pressure this week.
Against a basket of its rivals, the dollar edged 0.1 percent higher at 93.542 but remained well within reach of a three-week low of 93.213 hit in the previous session.
The dollar has come under pressure this week as the euro bounced back from 10-month lows thanks to an ebb in Italian political concerns and speculation that the ECB could signal intentions to start unwinding its massive bond purchasing programme when it holds a policy meeting on June 14.
The euro was broadly flat at $1.1778 after rising to a three-week high of $1.1840 overnight.
It was up more than 1 percent on the week and was set to post its biggest weekly gain since mid-February.
“The latest moves in currencies are driven by developments in the bond markets. Risk aversion is taking place in such regions as Europe, which could see the ECB begin unwinding its stimulus,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.
The Australian dollar fell more than 0.6 percent in early London trading at $0.7576 and is poised for its biggest weekly drop in a month.
“There are also concerns towards next week’s political and policy fixtures, such as the FOMC (Federal Open Market Committee) meeting and the U.S.-North Korea summit.” (Reporting by Saikat Chatterjee; Additional reporting by Shinichi Saoshiro in TOKYO; Editing by Hugh Lawson)