- Trump says he will announce 'first of many' deals at 1400 GMT
- NYT reports agreement will be with Britain
- Traders watching Sino-U.S. talks on Saturday in Switzerland
- Dollar clings onto Fed-inspired gains from Wednesday
TOKYO/GDANSK May 8 (Reuters) - The dollar strengthened slightly against a basket of other currencies on Thursday after U.S. President Donald Trump said he would announce "a major trade deal" later in the day.
The dollar rose by about half a percentage point to 144.44 yen and to 0.8275 Swiss francs , extending gains made the previous day after the Federal Reserve affirmed its wait-and-see approach.
The euro was slightly weaker at $1.1291, following a 0.56% decline on Wednesday that was its biggest in two weeks.
The U.S. dollar index , which measures the greenback against six major peers, edged up to 100.04.
Posting on his Truth Social platform, Trump said he would hold a press conference at 1400 GMT about a "major trade deal with representatives of a big, and highly respected, country," adding that it would be the "first of many". He did not name the country or provide other details, with the New York Times reporting it would be Britain.
Prior to the New York Times report, analysts had flagged the chances of a U.S. trade agreement after Britain clinched a free trade pact with India earlier in the week.
"The UK has struggled to make deals with different countries following the exit from the EU and has been waiting on a deal with the U.S. for a long time. It definitely matters but let's see what the deal is going to be," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank.
"I'm cautiously optimistic," Kundby-Nielsen said. "On balance I would think it's positive for the pound."
Sterling initially climbed as much as 0.5% before losing its gains to trade 0.08% down at $1.3279 as of 07:47 GMT, with the Bank of England widely expected to announce a quarter-point rate cut later in the day.
Last week, Trump said he had "potential" trade deals with India, South Korea and Japan.
"The market is running with the idea that any trade deal is good news, because it provides a certain degree of clarity and could provide a template for others to follow," said Rodrigo Catril, senior FX strategist at National Australia Bank.
At the same time, a British trade deal is considered among the easier negotiations, while talks with Europe and particularly China are expected to be more complicated, he said.
"The devil will be in the details," Catril said. "These deals are not going to come for free."
Investors will watch closely for any signs of thaw when U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer meet China's economic tsar, He Lifeng, on Saturday in Switzerland.
Trump suggested on Wednesday that Beijing initiated the talks, and said he was not willing to cut tariffs on Chinese goods to nurture negotiations.
The dollar edged up 0.07% to 7.2343 Chinese yuan in offshore trading .
It started Thursday on the front foot, a day after the Federal Open Market Committee (FOMC) warned of rising risks to the economy from higher inflation and unemployment, but left interest rates unchanged, as widely expected.
"It's not at all clear what the appropriate response for monetary policy is at this time," Fed Chair Jerome Powell said, as it was uncertain whether economic growth will continue to grow at a steady pace in the context of trade uncertainty and a possible spike in inflation.
Markets currently price three quarter-point rate cuts by year-end, with the next coming in July or September.
"From here, we expect communication from Chair Powell and other FOMC members to focus on making sure inflation expectations are anchored," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia. "There is a risk public statements lean hawkish."
Elsewhere, the Swedish and Norwegian crown were trading at 9.662 and 10.3636 per dollar, respectively, little changed after Sweden's Riksbank and Norway's Norges Bank held their rates as expected.
Next up is the Bank of England's rate decision later in the day, where focus will be on how gradually the bank intends to loosen monetary policy over the course of the year.
"There is a case they will lean on the more dovish side," Kundby-Nielsen said.
Reporting by Kevin Buckland and Linda Pasquini; Editing by Jacqueline Wong, Sam Holmes and Emelia Sithole-Matarise
Source: Reuters