FOREX-Dollar gains on renewed U.S.-China trade worries

* China to request WTO to slap duties on U.S. goods

* Euro, sterling stall after rising on hopes for Brexit deal

* Report on potential Deutsche, Commerzbank merger supports euro

* Australian dollar slides to lowest since Feb 2016

* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh (Updates trading, changes previous dateline from LONDON)

By Richard Leong

NEW YORK, Sept 11 (Reuters) – The U.S. dollar edged up against a basket of major currencies on Tuesday as concerns about trade friction between China and the United States prompted some safe-haven buying of the currency.

China will ask the World Trade Organization (WTO) next week for permission to impose sanctions on the United States, for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties. over the trade dispute between the world’s two biggest economies outweighed traders’ optimism about a possible agreement on the terms of Britain’s exit from the European Union and reversed some of euro and sterling’s gains on Monday.

The Australian dollar was another casualty of the trade tension between Beijing and Washington, tumbling to its weakest level against the greenback since February 2016.

“The is in positive territory this morning with the caught in the crossfire of trade spat between the U.S. and China,” Viash Sreemuntoo, corporate trader at XE said in a research note. “Investors continue to take a cautious approach amidst trade war headlines.”

At 10:27 a.m. (1427 GMT), the dollar index that tracks the greenback against six major currencies was up 0.06 percent at 95.210. It shed over 0.2 percent on Monday as the euro and sterling bounced after the European Union chief negotiator Michel Barnier hinted at a possible Brexit deal. euro was buoyed by a decline in Italian government borrowing costs after Economy Minister Giovanni Tria on Monday predicted that yields would drop as the government lays out its eagerly awaited 2019 budget. euro initially rose 0.4 percent to $1.16445 before turning lower in early U.S. trading. It later pared those losses to be little changed on the day at $1.15940 following a German magazine Der Spiegel report that said the executives of Deutsche Bank and Commerzbank were growing more open to the idea of a merger. touched a five-week high against the dollar earlier Tuesday before fading to $1.2989 GBP=D3 , down 0.3 percent on the day, according to Reuters data.

The Australian dollar AUD=D4 was down 0.26 percent to $0.70940 after hitting its lowest since February 2016 on concerns that potential damage to the Chinese economy from a trade war would hurt Australia’s exporters. New Zealand dollar also hovered near a 2-1/2 year low at $0.6505. China’s offshore yuan CNH=EBS fell 0.2 percent to 6.8673, a 2-1/2 week low. ========================================================

Currency bid prices at 10:29AM (1429 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=

$1.1591

$1.1592

-0.01%

-3.38%

+1.1643

+1.1566 Dollar/Yen

111.5400

111.1100

+0.39%

-1.00%

+111.5600 +111.0700 Euro/Yen

EURJPY=

129.29

128.83

+0.36%

-4.36%

+129.8000 +128.7800 Dollar/Swiss

CHF=

0.9736

0.9749

-0.13%

-0.07%

+0.9759

+0.9730 Sterling/Dollar GBP=

1.2999

1.3025

-0.20%

-3.80%

+1.3086

+1.2971 Dollar/Canadian CAD=

1.3144

1.3162

-0.14%

+4.51%

+1.3174

+1.3131 Australian/Doll AUD=

0.7091

0.7114

-0.32%

-9.10%

+0.7128

+0.7086 ar

Euro/Swiss

EURCHF=

1.1287

1.1302

-0.13%

-3.44%

+1.1343

+1.1264 Euro/Sterling

EURGBP=

0.8916

0.8898

+0.20%

+0.37%

+0.8937

+0.8880 NZ Dollar/Dolar NZD=

0.6503

0.6525

-0.34%

-8.23%

+0.6540

+0.6502 Dollar/Norway

8.3476

8.3878

-0.48%

+1.71%

+8.4012

+8.3412 Euro/Norway

EURNOK=

9.6785

9.7263

-0.49%

-1.73%

+9.7334

+9.6761 Dollar/Sweden

SEK=

9.0542

9.0667

-0.16%

+10.39%

+9.0795

+9.0105 Euro/Sweden

EURSEK=

10.4967

10.5130

-0.16%

+6.68%

+10.5190

+10.4820

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