FOREX-US dollar weakens against Swiss franc, yen as trade tensions resurfaces

By Chibuike Oguh and Alun John

NEW YORK/LONDON, Oct 14 (Reuters) - The U.S. dollar was lower against the safe-haven Swiss franc and Japanese yen on Tuesday following renewed signs of strain in U.S.-China trade relations, while the euro gained after the French government announced the proposed suspension of a landmark pension reform.

The dollar weakened 0.14% to 0.803 against the Swiss franc CHF= and was down 0.13% to 152.08 against the Japanese yen JPY=. The greenback gained against both currencies in the prior session.

"The market got caught a little bit yesterday," said Marc Chandler, chief market strategist at Bannockburn Capital Markets. "People wanted to believe that the U.S.-China trade tensions had de-escalated. But it's clear that they have not."

The U.S. and China on Tuesday began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil.

In addition, Beijing announced that it has taken countermeasures against five U.S.-linked subsidiaries of South Korean shipbuilding firm Hanwha Ocean and separately said it has launched an investigation into how a U.S. Section 301 probe affects its domestic shipping industry.

The tit-for-tat measures undermined what appeared to be a conciliatory tone from U.S. President Donald Trump at the weekend that had helped fuel some optimism at the start of this week.

French Prime Minister Sebastien Lecornu suspended a landmark 2023 pension reform until after the 2027 presidential election, bowing to pressure from leftist lawmakers who had demanded such a move to ensure his political survival.

The euro EUR extended gains against the dollar following the announcement. It was up 0.16% at $1.1587.

"It looks like there's going to be less fiscal austerity than the previous government. French bonds are having a good day - they are the best performing in the euro zone," Chandler added.

Britain's pound GBP= was off 0.30% on the dollar at $1.32955 after data showed British pay growth slowing and jobless claims ticking higher.

The pound was also softer against the euro EURGBP=, with the common currency up 0.37% at 87.18 pence.

The Australian dollar AUD=, often used as a liquid proxy for Chinese assets and broader risk sentiment given the two countries' close economic links, shed 0.52% to 0.64820, its lowest in nearly two months. The New Zealand dollar NZD= fell 0.26% to $0.571.

Elsewhere, cryptocurrencies were lower, with bitcoin BTC= dropping 3.44% to $111,822.21. Ethereum ETH= declined 7.06% to $3,986.91.