FOREX-Dollar gains on stock bounce and China’s upbeat data

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* China produces record trade surplus with U.S. despite tariffs

* Sterling retreats before EU summit next week

* Euro declines as ECB’s Draghi moderates inflation outlook

* GRAPHIC-World FX rates in 2018: http://tmsnrt.rs/2egbfVh

(Updates to U.S. afternoon trading, adds quote) NEW YORK, Oct 12 (Reuters) – The dollar climbed on Friday against a basket of currencies as global equity prices rebounded from this week’s rout and robust Chinese export figures soothed worries about the world’s second-biggest economy and its trade war with Washington. Euro and sterling snapped their three-day winning streak in advance of next week’s European Union summit where Britain and the European Union may strike a Brexit deal.

China’s exports jumped 14.5 percent in September from a year earlier, the biggest year-over-year increase in seven months and marking a record trade surplus with the United States. The data suggested that the tariffs U.S. President Donald Trump has slapped on Beijing have yet to bite. “The market breathed a sigh of relief with the Chinese trade numbers despite the tit-for-tat trade war with the U.S.,” said Dean Popplewell, vice president of market analysis at Oanda in Toronto. “People were happy to put on some risk.” A weaker yuan likely mitigated the sting from U.S. duties on $250 billion worth of Chinese-made goods, analysts said. U.S. Treasury Secretary Steven Mnuchin said on Friday that he told China’s central bank chief that currency issues need to be part of any further U.S.-China trade talks.

An index that tracks the dollar versus six major currencies was up 0.23 percent at 95.234, reducing its weekly loss to 0.4 percent. The dollar index touched a seven-week high of 96.15 on Tuesday as the U.S. 10-year Treasury yield hit a seven-year peak due to worries about rising inflation and U.S. government debt supply. “The underlying sentiment remains positive for the buck, but vulnerabilities, as this week exposed, remained, particularly on the political front ahead of U.S. midterm elections next month,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. The MSCI All-Country World index, which tracks stock prices in 47 countries, was up 0.57 percent on the day. It was down 4.4 percent on the week, which was its steepest decline since at least March. On Wall Street, share values rose on solid bank earnings and a bounce in the tech sector. The euro and pound retreated from two-week and three-week peaks, respectively, versus the greenback after EU Brexit negotiator Michel Barnier in comments on Wednesday suggested an agreement for Britain to leave the EU could be reached next week. The single currency was down 0.27 percent at $1.1562, while sterling was 0.59 percent lower at $1.3157. The common currency also fell after European Central Bank President Mario Draghi toned down his outlook for a rise in underlying inflation from “relatively vigorous” to “gradual.”

The Chinese yuan fell 0.65 percent to 6.9227 per dollar in offshore trading, as the latest Chinese export figures stoked concerns they would ratchet up trade tension between China and the United States.

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Currency bid prices at 1451 EDT (1851 GMT):

Description RIC Last U.S. Close Pct YTD Pct High Bid

Low Bid

Previous Change Change

Session

Euro/Dollar EUR= $1.1559 $1.1593 -0.29 -3.64 +1.1610 +1.1536 Dollar/Yen JPY= 111.9700 112.1600 -0.17 -0.62 +112.4900 +111.8900 Euro/Yen EURJPY= 129.44 130.02 -0.45 -4.25 +130.4900 +129.3700 Dollar/Swiss CHF= 0.9909 0.9893 +0.16 +1.70 +0.9930 +0.9883 Sterling/Dollar GBP= 1.3153 1.3233 -0.60 -2.66 +1.3258 +1.3150 Dollar/Canadian CAD= 1.3043 1.3027 +0.12 +3.71 +1.3049 +1.3002 Australian/Doll AUD= 0.7103 0.7123 -0.28 -8.95 +0.7139 +0.7102

ar

Euro/Swiss EURCHF= 1.1454 1.1470 -0.14 -2.01 +1.1492 +1.1450 Euro/Sterling EURGBP= 0.8786 0.8757 +0.33 -1.09 +0.8794 +0.8746 NZ Dollar/Dolar NZD= 0.6503 0.6520 -0.26 -8.21 +0.6532 +0.6501 Dollar/Norway NOK= 8.1717 8.2135 -0.51 -0.43 +8.2218 +8.1712 Euro/Norway EURNOK= 9.4471 9.5226 -0.79 -4.08 +9.5367 +9.4479 Dollar/Sweden SEK= 8.9619 8.9726 -0.40 +9.27 +8.9835 +8.9387 Euro/Sweden EURSEK= 10.3616 10.4032 -0.40 +5.31 +10.4095 +10.3560

(Reporting by Richard Leong Additional reporting by Tom Finn in London and Vatsal Srivastava in Singapore Editing by Leslie Adler)