* GRAPHIC: World FX rates in 2019
By Daniel Leussink
TOKYO, June 11 (Reuters) - The yen eased on Tuesday as investors'
risk appetite ticked up after the United States shelved plans to
impose tariffs on Mexico, though fresh U.S. trade threats against
China tempered overall market sentiment.
Financial markets over the last year have been gripped by fears of
escalating trade tensions between the world's two largest economies,
stoking worries over the outlook for global growth.
Against the safe-haven yen, the dollar advanced nearly 0.2% to
108.625 yen , extending a similar gain during the previous session.
The dollar index, which measures the greenback against a basket of
six peers, edged up 0.05% to 96.799 , building on a 0.2% gain
U.S. President Donald Trump said on Monday he was ready to impose
another round of tariffs on Chinese imports if he does not reach a
trade deal with China's president at the Group of 20 summit in Osaka,
Japan near the end of the month.
Since two days of talks to settle the U.S.-China trade dispute
last month in Washington ended in a stalemate, Trump has repeatedly
said he expected to meet Chinese President Xi Jinping at the G20
gathering. China has not confirmed any such meeting.
"It might not happen if the Chinese side thinks there isn't
any point in having a meeting if the opinions are far apart from the
start," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
"Trump has been applying pressure by emphasising there will
surely be a meeting, but it isn't clear what the Chinese side will do."
Broader market sentiment got a lift from the U.S.-Mexico trade and
migration deal, sending U.S. government bond yields higher overnight.
Futures for the S&P 500 were last up 0.2% , recovering after
trading in negative territory early in the session. U.S. 10-year
Treasury bond yields hit their highest since May 31
"The avoidance of tariffs on Mexican goods are supporting
risk sentiment," said Masafumi Yamamoto, chief currency
strategist at Mizuho Securities.
Investors were hesitant to take on more risk because of
"uncertainty" about what Trump does in relation to China
ahead of the G20 summit, he said.
In offshore trade, the Chinese yuan was last up 0.2% at 6.9310
yuan per dollar , reversing an early loss. It was still hovering not
far off a near seven-month low brushed on Friday.
Elsewhere, the Australian dollar was largely steady at $0.6961 ,
recovering after dipping to a one-week low earlier in the session.
The euro was little changed at $1.1314 .
The single currency dipped on Monday after two sources familiar
with the European Central Bank's policy discussions said on the
weekend that a rate cut was firmly in play if the bloc's economy
stagnates again after expanding by 0.4% in the first quarter.
The euro rallied nearly 1.5% last week after the ECB said rates
would stay "at their present levels" until mid-2020 instead
of hinting at rate cuts, as some had expected.
GRAPHIC: World FX rates in 2019
(Reporting by Danial Leussink Editing by Joseph Radford & Shri Navaratnam)
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