* Aussie rises 0.4 pct after RBA sounds less dovish than expected
* Trading remained subdued, many Asian markets closed for holidays
* Dollar index bounces off 200-day moving average
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh (Adds context on Swiss franc, updates prices)
By Tom Finn
LONDON, Feb 5 (Reuters) – The Swiss franc fell broadly across the board on Tuesday as hopes for progress in the U.S.-China trade dispute fuelled a recovery in investors’ appetite for risk taking that weighed on safe-haven currencies.
The Swiss franc, which tends to appreciate during bouts of economic uncertainty, sank to a 10-week low against the dollar.
Some of its sharpest losses were against traditionally high-yielding currencies such as the Australian dollar , against which it sank 0.7 percent.
“With the dollar/Swiss franc breaking through parity, some stops seem to have triggered in a broadly risk-on market,” said Kamal Sharma, director of G10 FX strategy at Bank of America Merrill Lynch in London.
Currency trading was fairly subdued due to many markets in Asia being closed for Lunar New Year holidays.
Investors shifted their focus to President Donald Trump’s State of the Union address at 0200 GMT Wednesday, which could hint at progress in U.S.-China trade talks.
The dollar held on to recent gains ahead of the speech.
“We don’t rule out more optimistic comments on trade … after the government shutdown, Trump is likely to seek policy wins,” said Chris Turner, head of currency strategy at ING.
“This should be positive for the current risk-friendly environment (solid U.S. data, yet cautious Fed) and support emerging market currencies against the dollar.”
The Australian dollar rose sharply, reversing earlier losses, after the Reserve Bank of Australia (RBA) held rates at record lows at its first meeting of the year but sounded less dovish than expected.
The dollar index, which measures the greenback against a basket of six key rivals, was up 0.1 percent at 95.98 after gaining for three straight sessions.
The Swiss franc also fell to a 10-week low against the euro.
Banks have touted a short position against the franc as a top bet in 2019 because Switzerland’s central bank is likely to lag its euro zone counterpart in tightening monetary policy and won’t tolerate rapid franc gains.
SNB governor Andrea Maechler said last month that negative interest rates and a readiness to intervene in the foreign currency markets were still needed to ward off a rise in the franc that would trigger deflation in Switzerland.
Meanwhile, the Aussie was last up 0.3 percent at $0.7247.
It had traded in negative territory during most of the session after weak retail sales for December but swung into positive territory after the RBA held rates.
“It will be hard for the Australian dollar to close above $0.7300, given the stubbornness of rates markets still pricing in considerable chance of RBA easing this year, premised on the RBA simply being too optimistic,” said Sean Callow, Sydney-based senior currency strategist at Westpac.
The euro was 0.2 percent weaker at $1.1417, off a three-week high of $1.15145 set on Thursday.
Sterling fell after a survey showed firms in Britain’s dominant services sector reporting job cuts for the first time in six years amid uncertainty over the progress of Brexit negotiations.
The pound was down 0.3 percent at $1.3003.
A Bank of England meeting on Thursday is not expected to provide much clarity on the course of interest rates.
Additional reporting by Daniel Leussink in TOKYO; Editing by