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FOREX-Hopes on U.S.-China trade talks lift dollar, pound falls

FOREX-Hopes on U.S.-China trade talks lift dollar, pound falls
* U.S., China signal movement to resolve trade conflict * Speculators' net dollar longs highest in nearly 2 years -CFTC * Pound hits 20-month low on report on no-confidence vote on May * Euro softens on unrest in France, awaits ECB meeting * GRAPHIC-World FX rates in 2018: http://tmsnrt.rs/2egbfVh (Updates market action, adds economist comment) By Richard Leong NEW YORK, Dec 11 (Reuters) - The dollar hit a one-month peak against a basket of currencies on Tuesday, as China and the United States discussed plans for talks to avert a trade war between the world's two biggest economies. The sterling sagged to 20-month lows after a report that said colleagues of Prime Minister Theresa May believed they had sufficient numbers to mount a no-confidence vote in her leadership, stoking anxiety about a chaotic British exit from the European Union.

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The dollar has reached a one-month high against a basket of currencies on Tuesday, as the U.S. and China have discussed plans for talks to avoid a trade war. Meanwhile, the pound has fallen to a 20-month low due to a report that colleagues of Prime Minister Theresa May believe they have enough support to call a no-confidence vote in her leadership. The euro has also softened due to unrest in France and is awaiting the European Central Bank's meeting. The call between the U.S. and China is seen as a step to reduce trade tension between the two countries. Speculators have increased their net long bets in the dollar to their highest level since December 2016. The sterling has steadied after steep losses on Monday, while the euro has edged up. The European Central Bank is expected to signal the end of its asset purchases. The euro was 0.26 percent lower at $1.1325 and down 0.24 percent at 128.44 yen.

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