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Dollar gains as doubts weigh on U.S.-China trade deal, Brexit

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NEW YORK — The U.S. dollar rose on Monday, after two days of losses, attracting

safe-haven bids, as optimism waned about a trade deal between the United States and China, and investors

fretted about the ongoing twists and turns on Britain’s exit from the European Union.

The safe-haven Swiss franc and Japanese yen also firmed slightly against the U.S. dollar.

U.S. President Donald Trump on Friday outlined the first phase of a deal to end the trade war and

suspended a threatened tariff hike, but officials on both sides said much more work needed to be done

before an accord could be agreed.

The safe havens gained on Monday after Bloomberg News reported China wants more talks as soon as the

end of October to hammer out the details of the “phase one” deal.

U.S. Treasury Secretary Steven Mnuchin also said on Monday an additional round of tariffs on Chinese

imports will likely be imposed if a trade deal with China has not been reached by the time they are set to

start, but added that he expected the agreement to go through.

Across the Atlantic, a deal to smooth Britain’s departure from the European Union hung in the balance

on Monday after diplomats indicated the bloc wanted more concessions from Prime Minister Boris Johnson and

said a full agreement was unlikely this week.

“Caution returned to markets as players realized that nothing has significantly changed with respect

to the U.S.-China trade war and Brexit,” said Joe Manimbo, senior market analyst, at Western Union

Business Solutions.

“The fact that nothing materially has changed and that uncertainty remains elevated served as a

reality check and excuse for investors to play it safe,” he added.

Analysts said the partial trade deal between the world’s two largest economies appeared to lack

substance with limited progress on structural issues such as technology transfers.

In afternoon trading, the dollar index rose 0.2% to 98.468m up from a three-week low reached on

Friday.

The dollar was slightly weaker against the yen, however, down 0.1% at 108.36 yen.

Trading volumes were thinner than usual with Tokyo’s market closed for a public holiday and a holiday

in the United States for Columbus Day.

Emerging market currencies and those closely linked to broad risk sentiment, such as the Australian

dollar and Swedish crown, slipped, after rallying at the end of last week.

Sterling also dropped against both the dollar and euro, after Britain and the EU

stressed over the weekend that there was a long way to go before they could agree a Brexit deal.

Sterling surged late last week after London and Brussels announced “intense” negotiations to try and

agree a Brexit deal before Oct. 31.

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Currency bid prices at 2:28PM (1828 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1029 $1.1040 -0.10% -3.84% +1.1048 +1.1014

Dollar/Yen JPY= 108.3500 108.4000 -0.05% -1.73% +108.5200 +108.0500

Euro/Yen EURJPY= 119.52 119.62 -0.08% -5.31% +119.6900 +119.2000

Dollar/Swiss CHF= 0.9965 0.9965 +0.00% +1.54% +0.9983 +0.9945

Sterling/Dollar GBP= 1.2577 1.2647 -0.55% -1.41% +1.2653 +1.2518

Dollar/Canadian CAD= 1.3230 1.3196 +0.26% -2.98% +1.3234 +1.3192

Australian/Doll AUD= 0.6776 0.6787 -0.16% -3.87% +0.6801 +0.6752

ar

Euro/Swiss EURCHF= 1.0991 1.0998 -0.06% -2.34% +1.1010 +1.0972

Euro/Sterling EURGBP= 0.8767 0.8729 +0.44% -2.42% +0.8811 +0.8716

NZ NZD= 0.6299 0.6336 -0.58% -6.22% +0.6335 +0.6282

Dollar/Dollar

Dollar/Norway NOK= 9.1076 9.0791 +0.31% +5.43% +9.1239 +9.0738

Euro/Norway EURNOK= 10.0470 10.0187 +0.28% +1.42% +10.0707 +10.0161

Dollar/Sweden SEK= 9.8152 9.8029 +0.06% +9.50% +9.8608 +9.8045

Euro/Sweden EURSEK= 10.8275 10.8213 +0.06% +5.49% +10.8670 +10.8183

(Reporting by Gertrude Chavez-Dreyfuss and Karen Brettell; Editing by Andrea Ricci and Sonya Hepinstall)

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