* Yen gains versus dollar, risk-off mood pervades
* Trade talks eyed by traders
* Euro down 0.2 pct versus greenback
* Graphic: World FX rates in 2019
By Tom Finn
LONDON, Feb 15 (Reuters) - The dollar recovered on Friday after
dismal U.S. retail sales and major currencies remained range-bound as
the market awaited developments in trade talks between Washington and Beijing.
The results of a meeting on Friday between U.S. Treasury Secretary
Steve Mnuchin and China's President Xi Jinping could be important for
foreign exchange investors.
Earlier in the week, markets had cheered U.S. President Donald
Trump's upbeat assessment of the talks but a lack of progress since
then has bred a risk-off mood causing declines in the Australian
dollar, a proxy for China risk.
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 do
not reach a deal by March 1.
The dollar remained fairly robust, trading up 0.2 percent at
97.1 against a basket of major currencies. After rising 1.6
percent in February, the dollar fell broadly on Thursday when poor
U.S. retail sales suggested a sharp slowdown in economic activity at
the end of 2018.
"Calling the next move in the dollar is pretty tough right
now. The start of the year saw investors move into under-valued risk
assets, but right now the mood is shifting towards one of secular
stagnation," said Chris Turner, head of foreign exchange strategy
Any negative news flow out of the trade discussions on Friday
could push the dollar back up again, given investor demand for
safe-haven assets during times of uncertainty, Turner said.
The euro was 0.2 percent lower at $1.1277.
The single currency was headed for a second week of losses and
down 1.7 percent year to date thanks to weaker-than-expected euro zone
Analysts expect the European Central Bank to keep monetary policy
accommodative for the rest of the year, which is likely to keep a lid
on the euro.
Elsewhere, sterling was broadly flat at $1.28 after British
Prime Minister Theresa May suffered a largely symbolic defeat on her
Brexit strategy on Thursday.
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 withdrawal agreement she negotiated with
Brussels last year.
(Reporting by Tom Finn; Editing by Catherine Evans)
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