News: FOREX-Yen gains, yuan weakens on report tariffs on China to stay through U.S. election

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    • U.S. and China expected to sign trade deal on Wednesday
    • U.S. labels Switzerland a currency manipulator, removes China
    • U.S. consumer prices rose slightly in December

    (Adds report on Chinese tariffs, updates prices)

    China's yuan weakened on Tuesday and the Japanese yen reversed earlier losses after a report that the United States will keep tariffs on Chinese goods through the U.S. election hurt risk sentiment.

    The news came a day before the signing of a preliminary U.S.-China trade agreement to ease an 18-month-old trade war.

    Bloomberg News reported that the United States will review and remove existing tariffs no sooner than 10 months after the deal is signed.

    The U.S. Treasury Department on Monday reversed its designation of China as a currency manipulator in what has been seen as a conciliatory gesture ahead of the deal signing.

    Risk sentiment has improved and demand for safe-haven assets like the yen have decreased on signs that the two countries are closer to de-escalating the trade war that has been blamed as a major headwind to global growth.

    The trade deal "doesn't address the structural issues, but at least for markets it reduces some of the stress and some of the anxiety and uncertainty that plagued the markets throughout 2019," said Mark McCormick, North American head of FX strategy at TD Securities in Toronto.

    The yen JPY= gained to 109.92 after rising to 110.2, the most yen per dollar since May 23.

    The offshore yuan CNH= weakened to 6.89, after rising to 6.87 per dollar, the strongest since July 11.

    The Swiss franc CHF= also hit session highs of 0.966 on safety buying, a day after the United States added Switzerland to its watchlist of currency manipulators.

    The greenback rose against the euro as year-end rebalancing that had benefited the single currency at the expense of the dollar continued to be unwound.

    "We are getting some of the reversal of that, along with, I think the macro story in Europe is still generally weak," McCormick said.

    The euro EUR= has fallen to $1.1130 from a five-month high of $1.1239 on Dec. 31.

    Data on Tuesday showed that U.S. consumer prices rose slightly in December and monthly underlying inflation pressures retreated, which could allow the Federal Reserve to keep interest rates unchanged at least through this year.

    The next major U.S. economic focus will be retail sales on Thursday.

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    	Currency bid prices at 2:22PM (1922 GMT) 
    
     Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
    											  Previous				   Change				  
    											  Session											
     Euro/Dollar	  EUR=		$1.1130		$1.1133	 -0.03%		 -0.70%	  +1.1144	 +1.1105 
     Dollar/Yen	   JPY=		109.9200	   109.9300	-0.01%		 +0.97%	  +110.2000   +109.8700 
     Euro/Yen		 EURJPY=	 122.36		 122.40	  -0.03%		 +0.34%	  +122.7500   +122.2000 
     Dollar/Swiss	 CHF=		0.9664		 0.9707	  -0.44%		 -0.14%	  +0.9713	 +0.9666 
     Sterling/Dollar  GBP=		1.3028		 1.2988	  +0.31%		 -1.74%	  +1.3030	 +1.2955 
     Dollar/Canadian  CAD=		1.3049		 1.3056	  -0.05%		 +0.49%	  +1.3079	 +1.3047 
     Australian/Doll  AUD=		0.6902		 0.6903	  -0.01%		 -1.69%	  +0.6909	 +0.6886 
     ar																							  
    
     Euro/Swiss	   EURCHF=	 1.0760		 1.0806	  -0.43%		 -0.85%	  +1.0820	 +1.0760 
     Euro/Sterling	EURGBP=	 0.8542		 0.8572	  -0.35%		 +1.04%	  +0.8595	 +0.8542 
     NZ			   NZD=		0.6616		 0.6629	  -0.20%		 -1.78%	  +0.6634	 +0.6604 
     Dollar/Dollar																				   
    
     Dollar/Norway	NOK=		8.8696		 8.8953	  -0.29%		 +1.04%	  +8.9043	 +8.8650 
     Euro/Norway	  EURNOK=	 9.8726		 9.9040	  -0.32%		 +0.35%	  +9.9119	 +9.8680 
     Dollar/Sweden	SEK=		9.4523		 9.4635	  -0.12%		 +1.12%	  +9.4782	 +9.4498 
     Euro/Sweden	  EURSEK=	 10.5238		10.5360	 -0.12%		 +0.52%	  +10.5589	+10.5150                    
 
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