May 16, 2019 / 1:28 PM / 7 days ago

CORRECTED-FOREX-Trade tensions support dollar, euro dips before elections

 (Corrects election timing in first paragraph to next week)
    By Karen Brettell
    NEW YORK, May 16 (Reuters) - The U.S. dollar rose to its
highest levels in a week against a basket of currencies on
Thursday as investors focused on trade war tensions, while the
euro was hurt by concerns about next week’s European
parliamentary elections.
    The euro was boosted on Wednesday by reports that U.S.
President Donald Trump is expected to delay a decision on
imposing tariffs on imported cars and parts by up to six months,
avoiding opening yet another front in his global trade battles.

    Until a delay is official, however, investors remain nervous
about a new trade war and how it may affect the global economy.
The dollar has benefited as a safe-haven currency even as the
United States and China are locked in a trade dispute.
    “The major theme is, is there enough room to fight multiple
trade wars at once?,” said Mark McCormick, North American head
of FX strategy at TD Securities in Toronto.
    “We had some green shoots of global economic stabilization
the last five months and now I think the concern is whether or
not renewed trade wars will sap some of that confidence and
whether or not that, along with some of the slowdown we’re
seeing in the U.S. economy, will tip the global economy back
into a less stable state,” McCormick said.
    Criticisms of European Union policy by Italian deputy Prime
Minister Matteo Salvini has also made investors nervous ahead of
elections in the region.
    Salvini said on Wednesday that EU budget rules
were "starving the continent" and must be changed, a day
after saying Italy should be ready to break them.
    "The risk is that we get more populist comments, such as
from the Italian Deputy PM. Italy remains one of the factors
keeping euro downside risks high," said Credit Agricole FX
strategist Manuel Olivieri.
    The greenback was also bolstered on Thursday by data that
showed U.S. homebuilding increased more than expected in
April, while a Philadelphia Fed index of business conditions
gained in May.
    The Australian dollar weakened after data showed that the
country’s unemployment rate rose to its highest in eight months,
cementing views its central bank may be forced to
lower borrowing costs soon to stimulate the economy.

    
    ========================================================
    Currency bid prices at 9:20AM (1320 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1186        $1.1200     -0.13%         -2.47%      +1.1225     +1.1185
 Dollar/Yen       JPY=        109.7400       109.5800    +0.15%         -0.47%      +109.7900   +109.3400
 Euro/Yen         EURJPY=     122.77         122.74      +0.02%         -2.73%      +122.9600   +122.5500
 Dollar/Swiss     CHF=        1.0103         1.0087      +0.16%         +2.94%      +1.0106     +1.0074
 Sterling/Dollar  GBP=        1.2798         1.2848      -0.39%         +0.32%      +1.2861     +1.2794
 Dollar/Canadian  CAD=        1.3426         1.3437      -0.08%         -1.55%      +1.3449     +1.3400
 Australian/Doll  AUD=        0.6910         0.6927      -0.25%         -1.97%      +0.6933     +0.6894
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1304         1.1296      +0.07%         +0.44%      +1.1317     +1.1292
 Euro/Sterling    EURGBP=     0.8739         0.8721      +0.21%         -2.73%      +0.8749     +0.8715
 NZ               NZD=        0.6561         0.6561      +0.00%         -2.32%      +0.6582     +0.6546
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.7157         8.7141      +0.02%         +0.89%      +8.7231     +8.6830
 Euro/Norway      EURNOK=     9.7512         9.7633      -0.12%         -1.56%      +9.7780     +9.7347
 Dollar/Sweden    SEK=        9.6131         9.5991      +0.02%         +7.24%      +9.6166     +9.5780
 Euro/Sweden      EURSEK=     10.7550        10.7530     +0.02%         +4.78%      +10.7745    +10.7381
 
    

 (Additional reporting by Abhinav Ramnarayan in London; editing
by Jonathan Oatis)
  
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