* Graphic: World FX rates in 2019
By Daniel Leussink
TOKYO, May 22 (Reuters) - The dollar hovered near a four-week high
on Wednesday, supported by higher U.S. yields after the United States
eased trade restrictions on Chinese telecommunications equipment maker
The move came as a relief to markets hit by escalating trade
tensions between the United States and China, though analysts said
sentiment remained fragile with tariff negotiations between the
world's two largest economies yet to produce a durable solution.
"The trade dispute won't be resolved easily, so the risk-off
mood won't come off all of a sudden. I think market sentiment will
rather improve one small step at a time," said Ayako Sera, market
strategist at Sumitomo Mitsui Trust Bank.
Against a basket of key rival currencies, the dollar was last a
shade lower at 98.014 , having brushed a 3-1/2-week high of 98.134
overnight. The index has risen 1.9% so far this year.
The U.S. Commerce Department blocked Huawei Technologies Co Ltd
from buying U.S. goods last week, leading several companies to suspend
business with the world's largest telecoms equipment maker.
Chipmakers, many of which sell to Huawei, bore the brunt of the
sell-off. But late on Monday, the United States granted Huawei a
licence to buy U.S. goods until Aug. 19.
Against the yen, the dollar was largely steady at 110.49 yen
, having hit a two-week high of 110.675 during the previous session.
The greenback has recovered 1.4% from a three-month trough of 109.02
yen touched on Monday last week.
Japan's exports fell 2.4% in April from a year earlier, down for a
fifth straight month, in a sign of weakness in external demand,
finance ministry data showed, compared with a 1.8% decrease expected
by economists in a Reuters poll.
Sumitomo Mitsui's Sera said the yen's weakness overnight was
thanks to the higher U.S. Treasury yields, which ticked up in response
to the recovery in U.S. equities.
"When yields are rising, it's natural for the dollar to be
bought. I think moves in U.S. yields are really important," she said.
The 10-year U.S. Treasury note yield was last largely unchanged
at 2.423% after moving further off a seven-week low of 2.354% brushed
on Thursday during the previous session.
The euro was steady at $1.1162 .
The single currency, which has given up 0.9% from this month's
high touched on May 1, has been under pressure in recent weeks on
dollar strength and due to concerns the upcoming European
parliamentary elections may see euroskeptic parties faring well.
The pound was at $1.2713 , hovering near a four-month low of
$1.2685 touched overnight. It briefly rose overnight after Prime
Minister Theresa May set out a "new deal" for Britain's
departure from the EU, offering sweeteners to Parliament including the
chance to vote on whether to hold a second referendum to try to break
the impasse over Brexit.
Yet traders doubted that a fractious Parliament would have to back
any new referendum.
(Editing by Shri Navaratnam)
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