* Euro reverses gains vs dollars
* Commodity currencies beneficiaries of improved risk sentiment
* China, U.S. agree to extend trade talks
* Markets look to speech by Fed's Powell
* Graphic: World FX rates in 2018
(Recasts, adds comment, FX table, updates prices, changes byline,
dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 10 (Reuters) - The dollar rallied from three-month
lows on Thursday, with investors reducing bearish positions on the
currency as they await resolution of U.S.-China trade negotiations,
the U.S. government shutdown, and Britain's exit from the European Union.
Analysts said the dollar's gains were also helped by the euro
falling, as it hit key resistance levels.
"The anti-dollar rally we saw yesterday is just stalling
out," said Boris Schlossberg, managing director of FX strategy at
BK Asset Management in New York.
"We're very much in a wait-and-see mode. The market is
waiting for resolution on the trade front, U.S. shutdown, and Brexit -
three factors that are keeping the market in suspended animation right
now," he added.
In midmorning trading, the dollar index rose 0.1 percent to
95.338, after earlier dropping to a three-month trough. It has
weakened in four of the last six sessions as traders bet U.S. interest
rates will stay steady in 2019.
Minutes from the Federal Reserve's Dec. 18-19 meeting showed
several policymakers were in favor of keeping rates steady this year.
Investors are now looking to Fed Chairman Jerome Powell's speech
before the Economic Club of Washington later on Thursday.
"The market is looking for signs that the Fed will pause or
significantly reduce its cycle of rate increases this year," said
Dean Popplewell, vice president of market analysis, at OANDA in Toronto.
"Thus far, there are no signals of a Fed U-turn on interest
rates, but market pressure is mounting. U.S policymakers to date have
been less data-dependent, and more agile in order to respond swiftly
to changing conditions," he added.
The euro, meanwhile, fell from a three-month high, having cleared
key market levels earlier after the Fed minutes signaled a more
cautious approach toward further rate hikes.
It was last down 0.2 percent at $1.1524 .
Data out of Europe has been fairly tepid. French industrial
production fell more than expected in November while Swedish
private-sector production data was fairly flat. [nEONJ110TY}
China and the United States, meanwhile, have extended trade talks
in Beijing, boosting oil prices and broader sentiment.
That has lifted China's offshore yuan to its highest level since
August, along with recent assurances from Beijing of further fiscal
boosts to the slowing economy.
The yuan has breached the key 6.8-per-dollar level in both onshore
and offshore trade.
Commodity currencies such as the Australian dollar have been
the biggest beneficiaries of improving risk sentiment this week. The
Aussie dollar was last up 0.2 percent at US$0.7184.
Currency bid prices at 10:02AM (1502 GMT)
Description RIC Last U.S. Close Pct Change
YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1524 $1.1541 -0.15%
+0.48% +1.1570 +1.1516
Dollar/Yen JPY= 108.0200 108.1600 -0.13%
-2.03% +108.2500 +107.7700
Euro/Yen EURJPY= 124.50 124.83 -0.26%
-1.36% +125.0600 +124.3600
Dollar/Swiss CHF= 0.9798 0.9743 +0.56%
-0.16% +0.9802 +0.9716
Sterling/Dollar GBP= 1.2760 1.2788 -0.22%
+0.02% +1.2801 +1.2729
Dollar/Canadian CAD= 1.3240 1.3207 +0.25%
-2.91% +1.3249 +1.3201
Australian/Doll AUD= 0.7183 0.7170 +0.18%
+1.90% +0.7197 +0.7146
Euro/Swiss EURCHF= 1.1296 1.1246 +0.44%
+0.37% +1.1296 +1.1238
Euro/Sterling EURGBP= 0.9031 0.9025 +0.07%
+0.52% +0.9060 +0.9021
NZ NZD= 0.6788 0.6786 +0.03%
+1.06% +0.6794 +0.6771
Dollar/Norway NOK= 8.4643 8.4685 -0.05%
-2.02% +8.4909 +8.4452
Euro/Norway EURNOK= 9.7572 9.7768 -0.20%
-1.50% +9.8011 +9.7461
Dollar/Sweden SEK= 8.8817 8.8664 -0.01%
-0.92% +8.8986 +8.8561
Euro/Sweden EURSEK= 10.2361 10.2370 -0.01%
-0.27% +10.2610 +10.2260
(Reporting by Gertrude Chavez-Dreyfuss; additional reporting by Tom
Finn in London; editing by Jonathan Oatis)
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