The dollar posted modest gains on Wednesday, as traders looked ahead to a possible outcome to drawn out U.S.-China trade talks, while a forecast for monetary policy easing knocked the Aussie.

Against the yen, the dollar traded at 109.12 yen off a two-week high of 109.205 hit on Tuesday. The greenback had found support on signs Washington and Beijing were moving closer to signing a deal to end their 16-month trade spat.

The U.S. currency rose slightly against the euro and British pound  last fetching $1.1012 per euro and $1.2853 per pound - both levels little changed this week.

The Australian dollar fell 0.2% to $0.6774. Trade is slowing ahead of the Thanksgiving holiday on Thursday in the U.S.

In Australia, a forecast from Westpac Bank Chief Economist Bill Evans saying he expected two central bank interest rate cuts and quantitative easing (QE) to be introduced next year sent the Aussie 15 ticks lower.

The Reserve Bank of Australia’s governor, Philip Lowe, had said on Tuesday he did not expect to have to use QE, but that it would become an option if rates fell to 0.25% from the current 0.75%.

Source : Reuters