July 25, 2018 / 3:11 PM / 5 months ago

FOREX-Dollar softens ahead of Trump-Juncker talks

    * Major currencies hemmed into tight ranges
    * Aussie drops on weak inflation figures
    * Yuan pulls back from record 13-month weakness
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates market action, byline, dateline previously LONDON;
adds quote)
    By James Thorne
    New York, July 25 (Reuters) - The U.S. dollar dipped against
a basket of currencies on Wednesday ahead of a meeting between
President Donald Trump and European Commission President
Jean-Claude Juncker, but investor caution about a trade rift
between the two economic powers limited movement.
    Lack of clarity over where a brewing U.S.-European trade
conflict is heading kept most major currencies, including the
dollar, range-bound on Wednesday as Juncker traveled to
Washington for trade-focused talks with Trump, set for 1:45 p.m.
ET (1745 GMT).
    "Markets are kind of squaring up ahead of the meeting
today," said David Gilmore, partner at FX Analytics in
Westbrook, Connecticut.
    The talks come after the United States imposed tariffs on
European Union steel and aluminum, and Trump threatened to
extend those measures to EU-made cars.
    The European Commission is preparing a list of $20 billion
of U.S. goods to be hit with retaliatory tariffs, EU trade
commissioner Cecilia Malmstrom said on Wednesday.
    The move "suggests they’re ready to go with plan B ... which
is a barroom brawl," Gilmore said.
    The dollar traded down 0.12 percent versus a basket of major
currencies at 94.495. The euro was up 0.1
percent at $1.1692. 
    Trump reinforced his criticism last week of the Federal
Reserve's policy on raising interest rates, saying it could hurt
the U.S. economy.
    He also accused the EU and China of manipulating their
currencies.
    "Short-term traders had to take notice of Trump's comments, 
but other countries did not take the bait. The dollar is fairly
stable. There is no currency war," Marc Chandler, global head of
currency strategy at Brown Brothers Harriman in New York, said
in a note.
    Against the yen, the dollar was 0.13 percent weaker at
111.04 yen per dollar.
    The yen found some support early this week on expectations
the Bank of Japan might be a step closer to scaling back some of
its aggressive monetary stimulus.
    The offshore yuan strengthened half a percent against
the dollar to 6.772 yuan as traders took profits after the
Chinese currency hit its weakest level since June 2017 on
Tuesday.
    The Canadian dollar reached a two-week high against its U.S.
counterpart as yield spreads between the two countries narrowed.
 The loonie was 0.4 percent higher at 1.3094
Canadian dollars to the greenback.
    The Australian dollar slumped after data on Wednesday
showed inflation remained stubbornly low last quarter despite
fairly robust economic growth. It traded 0.1 percent lower at
$0.7413. 

    
========================================================
    Currency bid prices at 10:26AM (1426 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1692        $1.1684     +0.07%         -2.53%      +1.1712     +1.1676
 Dollar/Yen       JPY=        111.0400       111.1900    -0.13%         -1.45%      +111.3800   +110.9500
 Euro/Yen         EURJPY=     129.85         129.92      -0.05%         -3.94%      +130.1800   +129.7800
 Dollar/Swiss     CHF=        0.9928         0.9935      -0.07%         +1.90%      +0.9944     +0.9908
 Sterling/Dollar  GBP=        1.3140         1.3143      -0.02%         -2.75%      +1.3177     +1.3134
 Dollar/Canadian  CAD=        1.3094         1.3152      -0.44%         +4.11%      +1.3165     +1.3085
 Australian/Doll  AUD=        0.7413         0.7420      -0.09%         -4.97%      +0.7448     +0.7393
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1609         1.1610      -0.01%         -0.68%      +1.1618     +1.1596
 Euro/Sterling    EURGBP=     0.8896         0.8890      +0.07%         +0.15%      +0.8902     +0.8878
 NZ               NZD=        0.6808         0.6799      +0.13%         -3.92%      +0.6820     +0.6787
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.1673         8.1763      -0.11%         -0.48%      +8.1884     +8.1492
 Euro/Norway      EURNOK=     9.5501         9.5552      -0.05%         -3.03%      +9.5657     +9.5431
 Dollar/Sweden    SEK=        8.7939         8.8149      -0.18%         +7.22%      +8.8313     +8.7805
 Euro/Sweden      EURSEK=     10.2829        10.3010     -0.18%         +4.51%      +10.3140    +10.2790
 
    

 (Reporting by James Thorne; additional reporting by Tom Finn in
London)
  
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