* Sterling cools on doubts about Brexit deal
* Futures imply traders see one more U.S. rate cut in 2019
* Graphic: World FX rates in 2019
(Updates market action)
By Richard Leong
NEW YORK, Sept 20 (Reuters) - The U.S. dollar rose against a
basket of currencies on Friday, for its first weekly increase in
three, prompted by hopes of progress in U.S.-China trade talks and
that the Federal Reserve would not lower rates aggressively.
Sterling retreated from a two-month high versus the greenback
after the Irish foreign minister said that London and the European
Union were not yet close to a Brexit deal.
U.S. and Chinese deputy trade negotiators are set to continue
talks that began on Thursday in an effort to lay the groundwork for
high-level discussions in early October that will determine whether
the world's biggest economies can reach a trade deal.
While tariffs and worries about protracted supply-chain disruption
have hampered global business activity, the U.S. economy is still
faring relatively well, analysts said.
"The U.S. economy is clearly doing better than anyone
else," said Joseph Trevisani, senior analyst at FX Street in New
York. "I'm still in the stronger dollar camp."
With housing starts at a 12-year high and factory output
rebounding in August, the longest U.S. expansion on record seems to
have more legs, he said.
In late U.S. trading, an index that tracks the dollar against a
basket of six major currencies was up 0.24% at 98.51 for a weekly
gain of about 0.25%.
The euro fell 0.2% on the day to $1.10175, while the greenback
slipped 0.37% to 107.645 yen.
Against a favorable economic backdrop, the Fed lowered key lending
rates by a quarter point on Wednesday, but signaled a higher bar to
further reductions in borrowing costs.
On Friday, Fed officials delivered different assessments on the
economy and what should be done about it.
Interest rates futures implied traders saw a 63% chance of another
rate cut by year-end, compared with 69% late on Thursday, CME Group's
FedWatch program showed.
Meanwhile, sterling was briefly the biggest gainer overnight
against the dollar after European Commission President Jean-Claude
Juncker said late Thursday he thought Brussels could reach agreement
with Britain on its departure from the European Union.
Sterling's gains faded after the comments by Irish Foreign
Minister Simon Coveney on a Brexit deal, and a Financial Times report
that British Prime Minister Boris Johnson had told colleagues he did
not expect to be able to reach a full "legally operable"
deal covering the Irish border at a meeting of EU leaders.
The pound was down 0.37% at $1.2476 after touching a two-month
high at $1.2582. It reached a four-month high of 87.875 pence per
euro before easing to 88.26 pence, down 0.15% on the day. ========================================================
Currency bid prices at 3:20PM (1920 GMT)
Description RIC Last U.S. Close Pct Change
YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1018 $1.1040 -0.20%
-3.93% +1.1068 +1.0997
Dollar/Yen JPY= 107.6200 108.0000 -0.35%
-2.39% +108.0800 +107.6300
Euro/Yen EURJPY= 118.58 119.27 -0.58%
-6.05% +119.3700 +118.5500
Dollar/Swiss CHF= 0.9913 0.9927 -0.14%
+1.01% +0.9935 +0.9891
Sterling/Dollar GBP= 1.2472 1.2524 -0.42%
-2.23% +1.2581 +1.2462
Dollar/Canadian CAD= 1.3275 1.3260 +0.11%
-2.65% +1.3300 +1.3254
Australian/Doll AUD= 0.6764 0.6789 -0.37%
-4.04% +0.6809 +0.6761
Euro/Swiss EURCHF= 1.0920 1.0960 -0.36%
-2.97% +1.0969 +1.0913
Euro/Sterling EURGBP= 0.8832 0.8814 +0.20%
-1.69% +0.8845 +0.8788
NZ NZD= 0.6257 0.6301 -0.70%
-6.85% +0.6308 +0.6256
Dollar/Norway NOK= 9.0631 8.9783 +0.94%
+4.91% +9.0671 +8.9656
Euro/Norway EURNOK= 9.9872 9.9136 +0.74%
+0.82% +9.9900 +9.9111
Dollar/Sweden SEK= 9.7189 9.6858 +0.11%
+8.42% +9.7378 +9.6612
Euro/Sweden EURSEK= 10.7073 10.6960 +0.11%
+4.32% +10.7205 +10.6880
(Additional reporting by Saikat Chatterjee in LONDON; Editing by
Bernadette Baum and Andrea Ricci)
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