Dollar low on talks between Canada and the United States, markets remain nervous about trade difficulties

TOKYO (Reuters) – The dollar fell on Wednesday as sources said Canada was ready to make a deal in the United States to settle their differences over the North American Free Trade Agreement.

China will ask the World Trade Organization next week for permission to impose sanctions on the United States for Washington's failure to comply with a ruling in a dispute over US dumping rights.

"Concerns about many things persist, so it becomes difficult to switch to an aggressive risk-taking stance," said Kumiko Ishikawa, senior analyst at Sony Financial Holdings.

"The dollar and the yen rose yesterday, but these gains are being felt because there is not much appetite for taking risks," she said.

The dollar fell slightly after two Canadian sources with first-hand knowledge of Ottawa's negotiating strategy said Ottawa was ready to offer the United States limited access to the Canadian dairy market.

Canada's protected dairy industry is a major stumbling block in the NAFTA negotiations between the two countries. Canadian Foreign Minister Chrystia Freeland returned to Washington Tuesday for talks to rescue NAFTA by the October 1 deadline.

The dollar index, which measures the greenback against six major currencies, was 0.07% lower at 95.185.

The Canadian dollar was little changed at 1.3073 US dollar after recovering nearly three-quarters of a percentage late at the US session on trade talks.

Yet the concern over the trade dispute between China and the United States – the world's leading economies – has left many investors behind.

The Chinese offshore yuan fell 0.1% to $ 6.8857 after hitting a two and a half week low of 6.8888.

The Australian dollar, considered an indicator of global growth due to significant trade exposure from China to China, fell 0.3% to 0.7093 dollars.

The Aussie traded a two-and-a-two-year low of 0.7085 dollars on Tuesday, as Australian exporters could suffer damage to the Chinese economy following a trade war.

An index for emerging market currencies was pinned to a 16-month low reached in the previous session.

"You can not deny that emerging markets have fallen and this has weighed on sentiment, and this has probably pushed a lot of money into the US and the dollar," said Bart Wakabayashi, director of the Tokyo branch. from State Street Bank.

"All these turbulence in emerging markets in addition to this commercial uncertainty have really pushed participants to the dollar and, to some extent, the yen," he said.

The Turkish lira was largely stable before a much-discussed meeting Thursday by the country's central bank, where the Monetary Policy Committee is expected to raise interest rates.

The euro fell nearly 0.2% to $ 1,1586, while the British pound lost nearly 0.2% to $ 1,3009, after a peak of 1.3087 hit Monday by a optimism about the prospects of a trade agreement with the European Union. .

Against the Japanese yen, the dollar fell 0.13% to 111.49 yen.