* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
LONDON, Dec 4 (Reuters) - The dollar traded near one-month lows on Wednesday as markets remained jittery about the progress of Sino-U.S. trade talks and waited for U.S. data that could show whether the prolonged trade spat is starting to damage consumption in the United States.
A Bloomberg report that the two sides were close to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal boosted the offshore-Chinese yuan by 0.2% to 7.05.
It had languished around seven-week lows to the dollar after U.S. President Donald Trump said on Tuesday a trade agreement may be delayed until after November 2020 U.S. elections.
But the report failed to significantly budge the greenback. Against a basket of its rivals, it traded at 97.753, above Tuesday's trough of 97.644, its lowest since Nov. 11.
"We have been down this road before on the trade agreement headline front so markets will take these headlines with a pinch of salt and investors are focusing on the U.S. data," said Manuel Oliveri, a FX strategist at Credit Agricole in London.
U.S. non-manufacturing ISM data is the highlight for currency traders to gauge whether the weak manufacturing ISM print earlier this week will spill over into the services sector ahead of the important monthly U.S. jobs data later this week.
HIGHEST INTEREST RATES
The greenback declined nearly 1% in the first two trading days this week as decent eurozone data and surprisingly strong China survey figures raised hopes that the global economy will pick up traction next year and boost demand for non-U.S. currencies.
U.S. President Donald Trump's statement that he had "no deadline" for an agreement with China hurt sentiment and boosted demand for the greenback as investors added long positions on a currency whose interest rates remained higher than most of its developed market rivals.
Investors are flocking to the currency which offers the highest interest rate and that is the dollar," said Morten Lund, a senior FX strategist at Nordea.
Money markets are pricing in a quarter point rate cut by the U.S. central bank until July next year. Even if that materialises, U.S. interest rates will remain more than 100 bps higher than the European Central Bank and the Bank of Japan.
The Australian dollar was the biggest loser against the dollar, falling 0.5% versus the greenback after some disappointing third quarter growth data and retracing a cumulative gain of 1.5% in the last two sessions.
The pound was the only currency to buck the broader market trend, gaining a third of a percentage point against the dollar and the euro, before an election next week.
Elsewhere, the yen stood at 108.60 yen versus the dollar on Wednesday, close to its strongest since Nov. 22.
The Swiss franc was quoted at 0.9875 versus the dollar, near its highest level since Nov. 4.