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FOREX-Euro bounces on expectations Trump will delay auto tariffs

Published 16/05/2019, 10:32 am
FOREX-Euro bounces on expectations Trump will delay auto tariffs
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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Trump expected to delay imposing auto tariffs, easing trade woes

* Euro lifted on hopes transatlantic trade tensions won't heat up

By Shinichi Saoshiro

TOKYO, May 16 (Reuters) - The euro was buoyant on Thursday as trade concerns eased on expectations that U.S. President Donald Trump will delay implementing tariffs on imported cars.

Trump administration officials told Reuters on Wednesday that the president is expected to put off a decision on imposing tariffs on imported cars and parts by up to six months, for now preventing a further increase in transatlantic trade tensions. euro was 0.05% higher at $1.1207 EUR= , having bounced overnight from a one-week low of $1.1178. The single currency was initially hit as Italy's Deputy Prime Minister Matteo Salvini criticized European Union rules for the second day.

"Long term prospects for the euro are not particularly bright, given the region's soft economic fundamentals. But the news on the auto tariff delay is helping the euro establish support at the $1.1200 threshold," said Shin Kadota, senior strategist at Barclays (LON:BARC) in Tokyo.

The dollar traded little changed at 109.500 yen JPY= .

The greenback had retreated to a low of 109.150 against the safe-haven yen on Wednesday as U.S. yields slid on weak U.S. April retail sales and industrial output data. China had also reported surprisingly weaker growth in retail sales and industrial output for April, denting riskier assets. the U.S. currency retraced its losses against the yen as trade tensions softened.

The dollar index against a basket of six major currencies was nearly flat at 97.542 .DXY after posting modest gains the previous day.

The Australian dollar nudged down 0.1% to $0.6922 AUD=D4 , staying within touching distance of a 4-1/2-month low of $0.6915 touched the previous day on weak domestic wages data and soft Chinese economic indicators.

Immediate focus for the Aussie was on the Australian employment data due at 0130 GMT. (Editing by Shri Navaratnam)

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