Yen, Swiss franc fall in New York

The safe-haven yen and Swiss franc fell on Wednesday, as risk appetite improved, after more positive rhetoric on US-China trade negotiations from US President Donald Trump.

The yen earlier rose to two-week highs against the dollar, while the Swiss franc climbed to four-week peaks as trade uncertainty persisted.

Those concerns, though, eased as the New York session got underway after Trump said on Wednesday that trade talks with China were going "very well." He sounded more positive than on Tuesday when he said a trade deal might have to wait until after the November 2020 US presidential election.

"Today's news is more about optimism on a US-China trade deal," said Brendan McKenna, currency strategist at Wells Fargo in New York. "That's probably why we're seeing some of the safe-haven currencies such as the yen, dollar, and Swiss franc sell off, while some of the emerging market currencies outperform."

US economic data was also a focus for currency investors, especially after weaker-than-expected US private-sector jobs data on Wednesday and a soft services report that fueled worries about a slowdown in the world's largest economy.

A private survey showed that US private-sector hiring in November unexpectedly slowed to its weakest pace in six months, as goods producers and construction companies cut jobs.

US companies' jobs rose by 67,000 last month, the ADP National Employment Report said. The median forecast among economists polled by Reuters called for a gain of 140,000 jobs.

Following the soft payrolls report, data showed that the US service sector slowed in November, with the Institute for Supply Management's non-manufacturing index falling to 53.9 in November from 54.7 the previous month.

The weaker-than-expected US services report came after poor US manufacturing data earlier this week.

"It's fair to say that the US economy is slowing down," said Wells Fargo's McKenna. "But is it slowing down enough that the Federal Reserve will have to cut rates again? I think it's a little too early tell at this point."

He added that the Fed is likely in a wait-and-see mode on whether some of the measures they have recently undertaken have filtered down to the real economy.

The Fed, at its last monetary policy meeting, said it was on hold after cutting interest rates three times this year. But some analysts suggested that the Fed may have to reconsider that stance if US economic data continues to underwhelm going forward. In afternoon trading, the dollar index slipped 0.1% to 97.648, after earlier dropping to a one-month low of 97.433.

Against the yen, the dollar rose 0.2% to 108.90 yen, while gaining 0.2% versus the Swiss franc to 0.9895 franc.

Sterling, meanwhile, gained 0.7% versus the dollar to $1.3090, lifted by growing expectations that Britain will avoid a hung parliament after next week's election.