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Euro backed ahead of Lagarde speech, bounces rand by Reuters




By Wayne Cole

SYDNEY (Reuters) – Bigger currencies started off the week quietly with a Tokyo holiday, leaving thin trading conditions and investors waiting to hear the first official speech of the new head of the European Central Bank later in the session.

The dollar had tried to accumulate on Friday after American payroll methods beat expectations, but was undone by a soft production survey that made it look heavy.

The euro started the weekly business at $ 1

.1168 () which bulls looked to test the October 1.109 peak and the 200 day moving average of $ 1.1195.

Against a basket of currencies, the dollar set at 97.218 () after touching a three-month low of 97.107 on Friday. It was now aimed at the August tap of 97,033.

The dollar did a little better on the yen when safe havens fell out of fashion, ending up at 108.23 from Friday's low around 107.87.

Sterling remained a good bid for $ 1.2935, following last month's rally from $ 1.2200 as investors bet, there was less risk of a hard Brexit now that an election campaign was underway.

One of the few movers was the South African rand, which rose when investors were apparently relieved that Moody's had only reduced its outlook for the country's debt on Friday and did not reduce it to garbage anyone had feared.

Rand was quoted at 1% to $ 14.8650 per dollar and recovered some of the sharp losses that were inflicted last week. [19659002] The US dollar itself has been under pressure since the Federal Reserve cut interest rates last Wednesday, leaving the door open for more if needed, while all but excluding the risk of sharpening.

"Global policy rates are converging again at the bottom. It probably means less currency volatility as interest rates shrink and the likelihood of a policy shift decreases," said Marshall Gittler, an analyst at ACLS Global.

"It will probably also mean a weaker USD, CAD, AUD and NZD as these are the currencies with the highest interest rates at present and therefore the largest leeway to cut interest rates. This is probably why the USD and CAD were the major ones The losers last week. "

Similarly, the most important gains last week were the Swedish and Norwegian currencies, as interest rates in both countries are seen to be on hold or even rise in the coming months. [19659002] Central banks in Australia and the United Kingdom are holding policy meetings this week and are expected to stay steady, although there is some speculation whether the Bank of England may lose its sharp bias.

The new head of the European Central Bank (ECB) Christine Lagarde gives her first speech in the role later on Monday and the markets assume that she will stick to the simple policy script left by Mario Draghi.

There are also at least seven Fed speakers to speak this week.

Investors are also hanging onto the Sino-US trade talks after both sides said they had made progress toward a phase-1 deal that could be signed sometime this month.

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