FOREX-Dollar eases, yuan at 5-month high as Biden-Xi talks sound friendly

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    * Yuan hits 5-month peak; AUD, NZD make small gains
    * Euro creeps from 16-month trough
    * U.S. retail sales data to guide inflation outlook 

    By Tom Westbrook
    SYDNEY, Nov 16 (Businesshala) - The dollar eased broadly against
riskier currencies and the yuan scaled a five-month high on
Tuesday, as talks between U.S. and Chinese leaders seemed to
have an amicable start, while traders awaited looming U.S.
retail sales data.
    The euro also scraped off a 16-month low and rose
almost 0.2% to $1.1383 as it licks wounds from a drubbing on
Monday amid concerns about COVID-19 outbreaks and pushback on
rate hike expectations from Europe's central bank chief.    
    Calling U.S. President Joe Biden an "old friend," his
Chinese counterpart Xi Jinping said their countries must
increase communication and cooperation. Both leaders stressed
their responsibility to avoid conflict in opening remarks.

    By the halfway point in talks, the yuan had
climbed to its highest since June in onshore trade at 6.3666 per
dollar. The risk-sensitive Australian and New Zealand dollars
also rose about 0.2% each while the safe haven yen eased a
    "Xi called Biden "my old friend" and said that the two
countries should work together," said Qi Gao, Asia FX strategist
at Scotiabank. "Therefore, the situation after the meeting
should be better," he said, helping the yuan and other
currencies which are sensitive to the tone of U.S.-China ties.
    The Aussie also shrugged off more jawboning from central
bank head Philip Lowe who in a speech again pushed back on
market pricing for hikes as soon as 2022, arguing inflation was
likely to lag well behind spikes seen elsewhere.
    The Aussie traded just above its 50-day moving
average at $0.7368. Swaps markets are still priced for 100 basis
points of hikes by early 2023.
    The kiwi, which is awaiting a central bank meeting
in New Zealand next week, edged up to $0.7060 with the broadly
positive mood in Asia.
    The yen fell slightly against the euro and the dollar, last
trading at 114.16 yen per dollar and 129.95 yen per
    U.S. retail sales data is due at 1330 GMT and follows a
surprisingly weak consumer sentiment reading last week and an
unexpectedly strong business conditions survey, which had helped
to lift Treasury yields on Monday.
    Economists expect month-on-month growth accelerating to 1.2%
and a surprise on the upside would further highlight the
contrast across the Atlantic where European Central Bank head
Christine Lagarde has emphasised the economy's fragility.

    The common currency crumbled to a 16-month low of $1.1356 in
the wake of her comments pushing back on market expectations of
tightening and lacks chart support until around $1.12. The drop
propelled the U.S. dollar index to 2021 high of 95.595.
    "We expect the cautiousness of the ECB on policy to limit
recovery prospects for the euro against the dollar in the coming
months," said Rabobank senior FX strategist Jane Foley.
    "Our current mid-2022 forecast of EUR/USD at $1.14 is
looking outdated ... we will be revising our forecasts later in
the week."
    The gulf in tone across the Channel sent the euro on its
steepest slide against the pound in six months on Monday as Bank
of England Governor Andrew Bailey told a parliamentary committee
he was "very uneasy" about inflation.
    Sterling was steady at 84.71 pence per euro and a
fraction stronger on the dollar at $1.3433 on Monday.

    Canada's central bank chief Tiff Macklem was even more
forthright and said "we are getting closer" to hikes in an
opinion piece, driving the Canadian dollar to a four-and-a-half
year high against the euro.
    Bitcoin has drifted lower from last week's
all-time high and slipped about 4% to a 10-day trough of $60,700
and fellow cyptocurrency ether was also off peaks and
fell 5% to $4,320.

    Currency bid prices at 0357 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.1381        $1.1367     +0.12%         -6.85%      +1.1386     +1.1360
 Dollar/Yen                   114.1850       114.1850    -0.04%         +10.50%     +114.3050   +114.1400
 Dollar/Swiss                 0.9240         0.9246      -0.09%         +4.42%      +0.9257     +0.9238
 Sterling/Dollar              1.3431         1.3415      +0.11%         -1.70%      +1.3437     +1.3412
 Dollar/Canadian              1.2501         1.2511      -0.08%         -1.83%      +1.2517     +1.2493
 Aussie/Dollar                0.7357         0.7348      +0.14%         -4.35%      +0.7368     +0.7343
 NZ                           0.7055         0.7045      +0.16%         -1.74%      +0.7063     +0.7040
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Tokyo Forex market info from BOJ       

 (Editing by Shri Navaratnam and Jacqueline Wong)
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