New Zealand dollar leads faint risk rally, Brexit promise lifts the pound

On Monday, the dollar and other export-focused currencies gained support following positive signs of the U.S. economy and news on a possible China-US trade deal boosted investor confidence.

The GBP rose too, on hopes for an imminent Brexit and an end to years of political paralysis.

The New Zealand dollar best illustrated the day's mood and weariness on the flow of trade news. It rose 0.4% against the safe-haven Japanese yen to 69.83 yen.

"Even if the numbers are small, there's a message in there that risk appetite has improved," said Westpac F.X. strategist Sean Callow.

The dollar gained 0.1% on the yen to 108.76 yen- touching its highest since Nov 14. against the euro at $1.1012.

The dollar sat at 98.278 against a basket of currencies, just below a two-week high.

The GBP rose 0.1% to $1.2847 after the British Prime Minister Boris Johnson promised to bring a deal to leave the European Union to parliament before Christmas.

His Conservative Party is leading in opinion polls ahead of the Dec.12 election.

"The markets are holding on to any sort of positivity we get at the moment," said Sean MacLean, research strategist at Pepperstone, a brokerage in Melbourne. "We want to keep that momentum going."

Over the weekend, China announced its plans to improve the protection of intellectual property rights. It's seen as a move to address the striking point between the two countries.

The announcement kept hopes alive for a breakthrough in trade talks.

Robert O'Brien- the U.S. national secretary adviser also said on Saturday that a deal was possible by the end of the year.

Better-than-expected U.S. manufacturing data reinforced the USD

Positive U.S. Manufacturing data boosted the greenback- seen as staving off the need for another rate cut. The primary check on confidence has been the rising tensions over Hong Kong.

Anti-government protests have hit Hong Kong for more than five months. China has already reacted angrily to the passage of the U.S. legislation backing protestors. Congress has cleared the bill, but President Trump is yet to endorse it.

"The price of the 'Hong Kong bill' will be increased underlying U.S.-China tensions," said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore, adding that means greater uncertainty around the trade deal.

Nevertheless, the day's optimistic sentiment was enough to lift the trade-exposed Australian dollar 0.2% higher on the dollar to $0.6796, and for the New Zealand dollar to gain 0.3% to $0.6421.

China's yuan strengthened slightly to 7.0356.

Later in the trading day, the focus is expected to shift to German service-sector data and a speech from the European Central Bank's Chief Economist Philip Lane at 1800 GMT.

U.S. Federal Reserve Chairman Jerome Powell makes a speech at 0000 GMT.