May 17, 2019 / 1:11 PM / 2 months ago

FOREX-Trade tensions boost yen, yuan weakest since Nov

 (New throughout, updates trading and comments to U.S. market
open, new byline, changes dateline, previous LONDON)
    By Karen Brettell
    NEW YORK, May 17 (Reuters) - The safe-haven Japanese yen
gained on Friday and the offshore Chinese yuan weakened as
escalating trade tensions between the United States and China
raised concerns about global growth.
    The United States must show sincerity if it is to hold
meaningful trade talks, China said on Friday, after U.S.
President Donald Trump dramatically raised the stakes with a
potentially devastating blow to Chinese tech giant Huawei.

    “Rhetoric from both sides is getting more heated, making a
US-China deal seem a long way off,” Win Thin, global head of
currency strategy at Brown Brothers Harriman in New York, said
in a report.
    “At this point, this means there will be no high-level
negotiations between the two until a potential Trump-Xi
(Jinping) meeting at the G20 meeting in late June. This means
the next round of tariffs will likely come into play, signaling
further escalation and making a deal that much harder,” Thin
    The world's two largest economies are locked in an
increasingly acrimonious trade dispute that has seen them level
escalating tariffs on each other's imports in the midst of
    The Chinese yuan fell as far as 6.949 against the dollar on
Friday, its weakest level since Nov. 30.
    China's central bank will use foreign exchange intervention
and monetary policy tools to ensure the yuan does not weaken
past the 7-per-dollar key level in the immediate term, three
people familiar with the central bank's thinking said.

    The Australian dollar dropped to its lowest level
since Jan. 3 on the escalating trade tensions.
    The euro gave back earlier losses against the dollar after
the White House said that President Donald Trump is delaying a
decision by up to six months on whether to impose tariffs on
imported cars and parts to allow for more time for trade talks
with the European Union and Japan.
    The single currency has been hurt this week by Italian
Deputy Prime Minister Matteo Salvini's comments that European
Union rules harm the country.
    Salvini said on Thursday that he would "tear apart" rules
that are "strangling" Italy if his party scores well in the
European parliamentary elections next week.
    Sterling hit a four-month low on Friday after cross-party
Brexit talks collapsed and concern grew about the impact Prime
Minister Theresa May's likely resignation would have on
Britain's exit from the European Union.
    Currency bid prices at 9:04AM (1304 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1172        $1.1172     +0.00%         -2.59%      +1.1184     +1.1159
 Dollar/Yen       JPY=        109.5800       109.8400    -0.24%         -0.62%      +110.0300   +109.5100
 Euro/Yen         EURJPY=     122.44         122.73      -0.24%         -2.99%      +122.9600   +122.2900
 Dollar/Swiss     CHF=        1.0101         1.0098      +0.03%         +2.92%      +1.0113     +1.0086
 Sterling/Dollar  GBP=        1.2750         1.2795      -0.35%         -0.05%      +1.2807     +1.2737
 Dollar/Canadian  CAD=        1.3511         1.3457      +0.40%         -0.92%      +1.3512     +1.3456
 Australian/Doll  AUD=        0.6880         0.6892      -0.17%         -2.40%      +0.6897     +0.6873
 Euro/Swiss       EURCHF=     1.1287         1.1284      +0.03%         +0.28%      +1.1293     +1.1270
 Euro/Sterling    EURGBP=     0.8762         0.8730      +0.37%         -2.47%      +0.8766     +0.8728
 NZ               NZD=        0.6527         0.6534      -0.11%         -2.83%      +0.6546     +0.6525
 Dollar/Norway    NOK=        8.7652         8.7440      +0.24%         +1.46%      +8.7779     +8.7399
 Euro/Norway      EURNOK=     9.7961         9.7821      +0.14%         -1.13%      +9.8012     +9.7764
 Dollar/Sweden    SEK=        9.6251         9.6370      -0.14%         +7.38%      +9.6536     +9.6178
 Euro/Sweden      EURSEK=     10.7553        10.7703     -0.14%         +4.79%      +10.7888    +10.7490

 (Reporting by Karen Brettell; editing by Jonathan Oatis)
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