Early trade in New York: Yen gains as report casts doubts on trade deal

The safe haven Japanese yen gained on Monday after a media report dashed fresh hopes that the United States and China are close to reaching a trade deal.

CNBC reported that China is pessimistic about reaching a trade deal due to US President Donald Trump's reluctance to roll back tariffs.

It came after Chinese state media Xinhua said on Sunday that China and the United States had "constructive talks" on trade in a high-level phone call on Saturday.

"I think the market is overreacting to this," said Mazen Issa, senior FX strategist at TD Securities in New York. "There was nothing substantive that came out that suggested the deal is off or on, it's just the ebb and flow" of the news each day.

Investors are looking for signs that tariffs imposed on each country's goods will be rolled back, as they are viewed as harming global economic growth.

Another round of US tariffs on Chinese goods is scheduled to take effect on Dec. 15. The yen gained to 108.64, from 109.02 before the CNBC report was released.

The euro reached at 10-day high against the greenback at 1.1063. The single currency has rebounded from a more than two-year low of 1.0877 on Oct. 1 on optimism a trade deal will be signed.

Sterling, meanwhile, was boosted by expectations that the Conservative (Tory) Party could win a majority in the Dec. 12 election.