- China strong midpoint fixing calms investors' nerves
- U.S. Commerce's Ross sees more trade pressure on China
- Major central bankers offer no new policy clues in Portugal
(Updates market action; changes dateline, previous LONDON)
The dollar was little changed on Wednesday, hovering near an 11-month peak against a basket of major currencies as China's signal of a tolerance of a stronger yuan offset anxiety about the global trade conflict.
The greenback, as well as the yen and Swiss franc, remained well supported as traders braced for possibly another round of tariffs.
"The market is holding its breath on what is the next development," said Mazen Issa, senior FX strategist at TD Securities in New York. "We just went through a significant policy move in trade."
Before Wednesday's market open, the People's Bank of China cut the yuan's midpoint rate CNY=PBOC to 6.4586 per dollar, the weakest level since Jan. 12 and much stronger than market models had suggested.
The move is seen as a bid to stabilize investor sentiment and avert the yuan from sagging further.
On Tuesday, the Chinese currency fell a five-month low of 6.4948 yuan in the offshore market CNH=D3 following U.S. President Donald Trump's threat of a 10 percent tariff on $200 billion of Chinese imports.
U.S. Commerce Secretary Wilbur Ross said the White House will likely keep up pressure on Beijing in an attempt to reach a deal on greater American access to Chinese markets and narrow its trade surplus with the United States.
In this climate of rising trade tensions, heads of major central banks spoke of this risk in their economic outlook at a conference in Sintra, Portugal.
U.S. Federal Reserve President Jerome Powell said "in principle changes in trade policy could cause us to have to question the outlook."
Still Powell and his peers at the European Central Bank and Bank of Japan, Mario Draghi and Haruhiko Kuroda, offered no fresh views on their policy stance.
At 11:50 a.m. EDT (1550 GMT), an index that tracks the dollar against the euro, yen, sterling and three other currencies .DXY was down 0.09 percent at 94.994 after touching an 11-month peak of 95.299 earlier on Wednesday.
The euro EUR= was little changed at $1.1584 and 127.56 yen EURJPY= . The greenback was steady against the Japanese currency JPY= at 110.11 yen. Many emerging currencies steadied after Tuesday's losses due to trade fears. The Mexican peso MXN=D2 gained 0.7 percent on the day, while the South African rand ZAR=D3 rose 0.9 percent.
The Australian dollar, seen as a proxy on market sentiment toward China, fell to a 13-month low of $0.73475 AUD=D4 on Tuesday before bouncing a bit to $0.73805.
The Swiss franc CHF= dipped 0.2 percent to 0.9959 per dollar, erasing the prior day's gains.
======================================================== Currency bid prices at 1151 EDT (1551 GMT):Description RIC Last U.S. Pct YTD High Bid Low Bid Close Change Pct Previous Change Session Euro/Dollar EUR= $1.1582 $1.1588 -0.05 -3.45 +1.1600 +1.1538 Dollar/Yen JPY= 110.1300 110.0400 +0.08 -2.25 +110.240 +109.870 Euro/Yen EURJPY= 127.57 127.53 +0.03 -5.63 +127.730 +127.130Dollar/Swiss CHF= 0.9958 0.9939 +0.19 +2.21 +0.9982 +0.9938 Sterling/Dollar GBP= 1.3203 1.3178 +0.19 -2.29 +1.3215 +1.3149Dollar/Canadian CAD= 1.3294 1.3282 +0.09 +5.70 +1.3310 +1.3268 Australian/Doll AUD= 0.7378 0.7381 -0.04 -5.42 +0.7408 +0.7370 ar Euro/Swiss EURCHF= 1.1534 1.1519 +0.13 -1.33 +1.1543 +1.1511 Euro/Sterling EURGBP= 0.8770 0.8795 -0.28 -1.27 +0.8801 +0.8769 NZ Dollar/Dolar NZD= 0.6875 0.6899 -0.35 -2.98 +0.6916 +0.6865
Dollar/Norway NOK= 8.1544 8.1820 -0.34 -0.64 +8.2065 +8.1545 Euro/Norway EURNOK= 9.4464 9.4851 -0.41 -4.08 +9.4936 +9.4473Dollar/Sweden SEK= 8.8781 8.8944 -0.23 +8.25 +8.9307 +8.8602 Euro/Sweden EURSEK= 10.2848 10.3090 -0.23 +4.53 +10.3172 +10.2690
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