* Dollar under pressure as risk-sensitive currencies gain

* Trump said to have asked to prepare trade deal draft

* Ebb in trade woes weighs on yen, lifts Aussie and yuan

* Traders awaits U.S. jobs data for potential lift

* Graphic: World FX rates in 2018

By Tom Finn

LONDON, Nov 2 (Reuters) – The dollar fell on Friday on signs
U.S. President Donald Trump is seeking to resolve a damaging
trade war with China.

The conflict between the world’s two largest economies has
cast a pall over the global economy and boosted safe-haven
demand for the greenback this year.

But the dollar sank to a seven-day low on Friday after
Bloomberg reported that Trump had asked U.S. officials to begin
drafting a possible trade deal with Beijing. Currencies hit hard by recent dollar buying including the
euro, the Norwegian and Swedish crowns and Australian and New
Zealand dollars climbed higher.

Analysts said the start of November had seen a flood of
end-of-month buying of dollars cease and a more positive mood
for risk-taking pervade markets after a brutal month for stocks.

"Either Trump is paving the way for a trade deal later this
month, or he’s cynically driving up equity indices ahead of U.S.
mid-term elections," said Kit Juckes, a strategist at Societe

"What’s for sure, is that talk of a trade deal has added
further juice to the last few day’s risk appetite, weakening the

The dollar index, which measures the greenback’s
value versus six major peers, moved lower by 0.2 percent to
96.101 after dropping nearly 0.9 percent overnight.

The Australian dollar , which is sensitive to
Chinese economic developments, rose half a percent to $0.72500.
The Aussie had jumped 1.8 percent on Thursday on increasing
confidence U.S.-China ties were improving.

Both the euro and the British pound rose
0.3 percent against the dollar.

The pound jumped on Thursday after the Bank of England kept
interest rates steady and hinted at slightly faster future rate
rises if Brexit goes smoothly.

Market participants were awaiting the U.S. jobs report due
at 1230 GMT for clues on the pace of further interest rate rises
in the United States.

"The relatively cheap dollar, might attract buyers if the
overall jobs report is robust," said David Madden, a strategist
at CMC Markets.

U.S. payroll figures are expected to have risen 190,000 in
October, from a 134,000 increase in the previous month.

With investor risk sentiment improving, emerging market
currencies made gains versus the dollar.

China’s yuan rose about 0.2 percent to a three-week high of
6.8970 in offshore trade after gaining 0.8 percent on

Worries about Chinese economic growth and the trade row had
pushed the offshore yuan to a 22-month trough of 6.9800 midweek.

Despite the dollar’s slide, some analysts were cautious
about further falls given the headwinds for the global economy.

"With the combination of ongoing overhang of trade wars, the
tightening Fed and the U.S. economy outperforming its G10 peers,
we don’t expect such across-the-board EM FX rallies vs USD to be
long-lasting," ING analysts said in a note to clients.

(Reporting by Tom Finn
Editing by Alexander Smith)

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