By Tommy Wilkes
LONDON (Reuters) - The euro slipped on Monday as the dollar gained ahead of proposed trade talks between the United States and China this week that investors hope will ease tensions between the world's two biggest economies.
Anticipated talks between Chinese and U.S. officials in Washington will take place in the next few days, according to media reports. Analysts say those attending will be lower-level officials, although hopes are high that the talks could yield a breakthrough in the months-long trade conflict.
Escalating trade tensions between the United States and its trading partners, in addition to a plunge in the Turkish lira, have boosted the dollar and taken a heavy toll on emerging market currencies.
The euro fell 0.2 percent to $1.1421 (EUR=) but was still above 2018 lows of $1.3010 hit last week. The euro slid to a 13-month low early last week amid concerns that the Turkish crisis could hurt European banks.
The dollar index rose 0.2 percent to 96.248 (DXY). Traders are also preparing for the release of Federal Reserve policy meeting minutes later this week and the Jackson Hole symposium for insights into the likely direction of U.S. monetary policy.
"Market participants will be eager to hear more details on the interpretation of the Fed's most recent comment that further gradual rate hikes were appropriate 'for now'. What does 'for now' mean and might it imply a possible change in forward guidance?" MUFG analysts said.
"Given our view that U.S. dollar bullishness has become a little excessive, this speech on Friday could well be a catalyst for a sharp reversal the other way as long dollar positions are pared."
Emerging markets were mostly lower although losses were small.
The Turkish lira
The offshore Chinese yuan
Dealers cited speculation that the Sino-U.S. trade talks could set the stage for a summit between U.S. President Donald Trump and Chinese President Xi Jinping in November.
The dollar rose 0.1 percent against the yen to 110.63 yen
Kazushige Kaida, head of foreign exchange at State Street Bank in Tokyo, said dollar/yen could test the 110-level in the event of an unexpectedly negative outcome from the Sino-U.S. trade talks.
"There will be more incentive to buy the dollar if risks recede, but I don't think dollar/yen will easily break out of its range as a result of the trade negotiations," Kaida said.
Elsewhere the Swiss franc rose 0.2 percent to 1.1366 francs per euro (EURCHF=) while sterling slipped slightly to $1.2740