* ECB decision due at 1145 GMT, press conference 1230 GMT
* Trump's delay to scheduled tariff hike boosts markets
* China's offshore yuan gains 0.5%, Aussie hits 6-wk high
* Graphic: World FX rates in 2019
By Tommy Wilkes
LONDON, Sept 12 (Reuters) - The euro hovered near $1.10 on
Thursday as traders waited to see the scale of fresh stimulus expected
from the European Central Bank, while China's yuan and Australia's
dollar were buoyed by further signs of a thaw in the U.S.-China trade war.
After a difficult August in which concerns about a global
recession sparked a scramble into safer assets, investors have been
returning to riskier markets this month, encouraged by China and the
United States making moves to ease trade tensions and by receding
fears of a no-deal Brexit.
China on Wednesday exempted a basket of U.S. goods from its
tariffs, while U.S. President Donald Trump said in a tweet he would
delay a scheduled tariff hike by two weeks in October.
Export-driven Asian currencies from Taiwan to Australia rallied on
the buoyant mood as the world's two largest economies each granted
concessions in their heated tariff dispute.
The Japanese yen, the go-to safe haven currency for nervous
investors, fell to a six-week low against the dollar. The yen breached
the 108 mark and was last at 107.98 yen per dollar, down 0.1% on the
day and far from its seven-month high of 104.46 plumbed last month.
The Aussie hit a six-week high and the offshore Chinese yuan rose
0.5% to a three-week high of 7.0737 against the dollar.
Market attention now turns to the ECB, the first of a series of
major central bank events, with the Federal Reserve and the Bank of
Japan meeting next week.
Investors almost universally expect a rate cut at Thursday's ECB
meeting as policymakers try to prop up the region's ailing economy.
The real uncertainty is whether policymakers will restart a
quantitative easing programme after some members of the governing
council in recent weeks expressed doubt about the need to relaunch
SEB strategist Jussi Hiljanen said he expected the ECB to cut the
deposit rate by 10 basis points, extend the forward guidance on rates
by six months and announce the restart of a quantitative easing
programme with monthly purchases lower than the market anticipated.
"Such a package of stimulus measures would be a
disappointment for the market, pushing long rates higher and EUR/USD
higher and steepening the curve," Hiljanen said.
The single currency has shed 3.5% since June and was steady at
$1.1017 in early European trade.
The dollar was slightly lower against a basket of currencies at
Sterling was little changed . The pound rocketed to a
six-week high on Monday, reversing last week's losses as investors
welcomed the British parliament's move to block a no-deal Brexit on
Despite the more positive mood in risk assets this week, analysts
expressed some caution about its sustainability.
"Just as the presidential tweet on tariffs this morning has
injected more momentum ... we are only one social media posting away
from a thoroughly unpredictable President turning sentiment on its
head," said Jeffrey Halley, senior market analyst for Asia
Pacific at brokerage OANDA.
(Additional reporting by Tom Westbrook in Sydney; Editing by Hugh Lawson)