* Dollar, yuan boosted by economic prospects
* Traders prepare for BoJ, ECB meetings
* Sterling on the ropes again after Javid comments
* Graphic: World FX rates in 2019 (Adds latest prices)LONDON, Jan 20 (Reuters) - The dollar rose to its strongestlevel of 2020 on Monday after last week's run of data confirmedthat the U.S. economy is holding up well, while China's yuanbriefly hit a new six-month high.Mostly, however, it was another quiet start to the week forcurrencies, with FX volatility near all-time lows and little inthe way of key economic data.Investors are focused on Tuesday's Bank of Japan meeting andThursday's European Central Bank meeting.Trading volumes were thin as Lunar New Year approaches inAsia and with U.S markets closed for Martin Luther King day onMonday.Figures on Friday showed U.S. homebuilding surged to a13-year high in December. Retail sales also rose and a gauge ofmanufacturing activity rebounded to its highest in eight months. The strength in the U.S. economy underlines its relativeoutperformance versus the euro zone, although recent data pointto a bottoming out in the European economy, as well as arecovery in China."Data released since the previous ECB meeting have beenpositive and consistent with the slightly more optimistic tonestruck by (ECB President Christine) Lagarde in Decemberregarding the economic outlook," RBC Capital Markets' currencystrategist Adam Cole said.The euro has failed to benefit much from the more positivenoises, however, and the euro/dollar exchange rate is firmlystuck within a tight trading range.The dollar edged up 0.1% against a basket of currencies,with the index rising to as high as 97.727, its strongest sinceDec. 24. The euro was down 0.1% to $1.1083 .China's offshore yuan rose to as high as 6.8458 , anew six-month high, before the rally fizzled. It traded at6.8692, down slightly, by 1620 GMT.
China on Friday posted its slowest annual growth figure inalmost 30 years, although December data showed revived businessconfidence and quickening factory output. Sterling dropped on Monday to as low as $1.2962 ,down 0.3% before recovering to $1.2997, after weekend commentsby finance minister Sajid Javid that Britain would not commit tosticking to European Union rules in post-Brexit trade talks. Sterling also declined versus the euro to 85.27 pence , down 0.1% on the session.The pound is now at the mercy of employment data on Tuesdayand business surveys at the end of the week. Money markets pricein a near 70% chance of a Bank of England rate cut later thismonth in the face of a struggling economy.Japan's yen was unchanged against the dollar at 110.16 yen ahead of the BoJ meeting on Tuesday.
"Reduced pressure on the BoJ to ease monetary policy furthershould help to ease downside risks for the yen although it hasclearly not been sufficient in the current 'risk-on' environmentto reverse the yen's weakening trend," MUFG analysts wrote.
The BoJ is expected to keep policy steady and nudge up itsgrowth forecasts as improved macroeconomic indicators take somepressure off the central bank for more stimulus. (Reporting by Tommy Reggiori WilkesEditing by Mark Heinrich and Andrew Heavens)
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