FOREX-Dollar on hold as market awaits news from G20 summit

Richard Leong

* U.S., China have agreed to tentative trade truce -SCMP Dollar on track for first quarter loss since Q1 2018

* Yen posts solid gain vs greenback in second quarter

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Updates market action, changes dateline, previous LONDON) NEW YORK, June 27 (Reuters) - The dollar held steady against most major currencies on Thursday as traders moved to the sidelines in advance of this weekend's G20 summit where China and the United States may reach a truce on their trade conflict. The world's two largest economies have agreed to a tentative truce in their trade dispute, Hong Kong's South China Morning Post cited sources as saying. U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to meet on Saturday.

The report eased fears that Trump would impose additional tariffs on $300 billion on Chinese goods, but financial markets remain on edge about the unpredictable trade talks, analysts and traders said. "It's just a lot of noise until there is a deal," said Minh Trang, senior foreign exchange trader at Silicon Valley Bank at Santa Clara, California. "We are in a holding pattern." Traders shrugged off a U.S. government report that showed the economy expanded at 3.1% in the first quarter, unchanged from its reading last month. At 10:24 a.m. (1424 GMT), an index that tracks the dollar against the euro, yen, sterling and three other currencies was up 0.01% at 96.219, holding above a three-month low of 95.843 reached on Tuesday. The index broke below its 200-day moving average last week, which analysts cite as bearish for the dollar, after the Federal Reserve signaled it was prepared to lower interest rates to combat the risk from global trade tensions and sluggish domestic inflation. The dollar index was on track for it first quarterly loss since the first quarter of 2018. China's offshore yuan rose 0.16% to 6.8771 per dollar , helping the renminbi back towards a six-week high of 6.8370 yuan per dollar touched last week. The offshore yuan, however, has weakened 2.26% in the second quarter. Whether Trump and Xi strike a trade truce this weekend could shape expectations on Fed policy in the coming months, analysts said. Traders have priced in the probability the Fed would lower rates in July and might cut rates at least three times by year-end, according to interest rates futures calculated by CME Group's FedWatch program. The yen edged down 0.04% to 107.825 yen per dollar. The Japanese currency has risen a solid 2.7% against the greenback in the second quarter, boosted by expectations of Fed rate cuts and the trade war. Rising tensions between Iran and the United States has also stoked safe-haven demand for the Japanese currency.


Currency bid prices at 10:24AM (1424 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low BidPrevious Change


Euro/Dollar EUR= $1.1365 $1.1368 -0.03% -0.91%+1.1381 +1.1349Dollar/Yen JPY= 107.8000 107.7700 +0.03% -2.23%+108.1500 +107.6600Euro/Yen EURJPY= 122.52 122.52 +0.00% -2.93%+122.8800 +122.4300Dollar/Swiss CHF= 0.9771 0.9780 -0.09% -0.44%+0.9814 +0.9768Sterling/Dollar GBP= 1.2687 1.2688 -0.01% -0.54%+1.2724 +1.2670Dollar/Canadian CAD= 1.3121 1.3125 -0.03% -3.78%+1.3138 +1.3110Australian/Doll AUD= 0.6999 0.6983 +0.23% -0.71%+0.7001 +0.6984


Euro/Swiss EURCHF= 1.1107 1.1116 -0.08% -1.31%+1.1144 +1.1105Euro/Sterling EURGBP= 0.8957 0.8958 -0.01% -0.30%+0.8965 +0.8938NZ NZD= 0.6693 0.6678 +0.22% -0.36%+0.6696 +0.6672


Dollar/Norway NOK= 8.5200 8.4939 +0.31% -1.37%+8.5247 +8.4902Euro/Norway EURNOK= 9.6848 9.6559 +0.30% -2.23%+9.6933 +9.6545Dollar/Sweden SEK= 9.2777 9.2607 +0.16% +3.50%+9.2911 +9.2529Euro/Sweden EURSEK= 10.5450 10.5280 +0.16% +2.74%+10.5555 +10.5212

(Reporting by Tommy Wilkes in LONDON Editing by Larry King, Hugh Lawson and David Gregorio)