* Graphic: World FX rates in 2019
* Yen gains versus dollar in Asian trade
* Euro down 0.12 pct versus greenback
By Vatsal Srivastava
SINGAPORE, Feb 15 (Reuters) - The dollar edged lower versus the
yen on Friday as dismal U.S. retail sales data reinforced expectations
the Federal Reserve will not raise rates this year, while the market
awaited developments in trade talks between Washington and Beijing.
U.S. retail sales posted their largest decline since September
2009, data showed on Thursday, a sign of weakness in the consumer
sector, which accounts for more than two-thirds of the economy.
"Poor retail sales data has reinforced the view that the Fed
will most likely keep rates steady this year," said Nick Twidale,
chief operating officer, Rakuten Securities Australia.
"Dollar/yen is indicative of the risk averse sentiment right
now...I am expecting the yen crosses to appreciate along with the
The dollar lost about 0.5 percent against the safe-haven yen in
the overnight session and was down 0.2 percent to 110.26 in Asian
trade. The yen rose 0.24 percent versus the euro to 124.48, having
gained around 0.2 percent on Thursday.
The Aussie and New Zealand dollars pared earlier gains, losing 0.3
percent to $0.7085 and $0.6816, respectively. Despite Friday's losses,
the kiwi is set to end the week higher by one percent. Earlier this
week, the Reserve Bank of New Zealand sounded less dovish on policy
than speculators had wagered on, leading traders to place bullish bets
on the currency.
The dollar index , a gauge of its strength versus six major
peers was marginally higher at 97.07, after weakening by 0.12 percent
in the previous session.
The main focus for the Asian market on Friday remains the outcome
of the high level trade talks between the United States and China this week.
Markets had earlier in the week cheered U.S. President Donald
Trump's upbeat assessment of the talks.
White House economic adviser Larry Kudlow said the
administration's top two negotiators would meet on Friday with Chinese
President Xi Jinping but that there had been no decision to extend a
March 1 deadline for a deal. Bloomberg had earlier reported that Trump
was considering a six-day extension of the deadline.
U.S. tariffs on $200 billion worth of imports from China are
scheduled to rise to 25 percent from 10 percent if the two sides don't
reach a deal by then, increasing pain and costs in sectors from
consumer electronics to agriculture.
Rakuten's Twidale said that any negative news flow out of the
trade discussions could push the dollar back up again, given investor
demand for safe-haven assets during times of uncertainty.
The euro was 0.1 percent lower at $1.1284. The single currency
has lost 0.4 percent this week and is down by 1.7 percent year to date
thanks to weaker-than-expected euro zone data. Analysts expect the
European Central Bank to keep monetary policy accommodative for the
rest of the year, which will most likely keep a lid on the single currency.
Elsewhere, sterling was down 0.16 percent at $1.2791. Traders
expect the pound to remain volatile in the coming weeks. Sterling is
set to finish the week 1.2 percent lower versus the dollar, its third
straight week of losses.
British Prime Minister Theresa May suffered a defeat on her Brexit
strategy on Thursday that undermined her pledge to European Union
leaders to get her divorce deal approved if they grant her
The United Kingdom is on course to leave the European Union on
March 29 without a deal unless Prime Minister Theresa May can persuade
the bloc to amend the divorce deal she agreed last year.
(Editing by Sam Holmes and Jacqueline Wong)
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