By Tom Westbrook
SINGAPORE (Reuters) - The dollar gave a little ground to riskier Asian currencies on Thursday, as investors hoped the Sino-U.S. trade deal could herald warmer relations between the world's two biggest economies and help to revive global growth.
Beijing and Washington touted the Phase 1 deal, signed overnight at the White House, as a step forward. [nL1N29K0MV]
U.S. Vice President Mike Pence said further Phase 2 discussions had already begun as negotiators work to resolve differences. [nW1N27201T]
That helped the trade-exposed Australian and New Zealand dollars to book modest gains, while the safe-haven Japanese yen softened slightly.
"We are living in a higher-tariff world in this year than last year, but against that is the removal of uncertainty," said Ray Attrill Head of FX Strategy, National Australia Bank.
"If you think that the trade situation is not going to be a bigger drag than it was over the last couple of years, then that's the glass half full interpretation of the outlook."
The beaten-up kiwi led gains in major currencies, rising 0.3% to $0.6635, while the Aussie tacked on 0.1% to its highest for the week at $0.6919.
The Chinese yuan, the most sensitive currency to the U.S.-China trade relationship, headed back toward a six-month peak hit on Tuesday, adding 0.1% to 6.8860 per dollar in offshore trade .
The greenback was also marginally lower against the euro (EUR=) and pound , nursing overnight losses. Against a basket of currencies (DXY) the dollar sat at 97.195.
The centerpiece of the deal is a pledge by China to purchase at least an additional $200 billion worth of U.S. farm products and other goods and services over two years. [nL1N29K1HY]
The United States will also cut by half the tariff rate it imposed on Sept. 1 on a $120 billion list of Chinese goods, to 7.5%.
Yet it addresses few of the issues that led to the trade conflict in the first place, checking potentially more dramatic market moves.
The safe-haven Swiss franc's overnight rally to a 15-month high of 0.9680 per dollar - close to where it held in early Asian trade - points to the level of caution.
The agreement does not fully eliminate tariffs. It is vague on enforcement. It makes no real progress on host of thorny problems from intellectual and many analysts are skeptical that the purchase targets are realistic.
"I'm not sure that there's any hidden gold nugget," said Westpac FX analyst Sean Callow.
"There's a sense of markets having traded off the positive vibes of the trade agreement for long enough, and it's very hard to see where the upside is from here," he said.
"If there is a step towards freer trade and lower tariffs, then it's obviously not going to happen anytime soon."