June 25, 2018 / 12:32 AM / 24 days ago

FOREX-Buoyant euro keeps dollar off 11-month highs, trade issues in focus

* Euro firm after upbeat euro zone data, further ebb in Italy woes

* U.S.-EU trade row seen deciding euro’s near-term direction

* Australian, Canadian dollars buoyant as oil rallies after OPEC

* Turkey’s president claims elections win, lira up more than 1 pct

By Shinichi Saoshiro

TOKYO, June 25 (Reuters) - The buoyant euro kept the dollar from hitting an 11-month high on Monday, with trade issues between the United States and the European Union seen deciding the near-term direction for the currencies.

The euro was 0.05 percent higher at $1.1662 after gaining about 0.5 percent on Friday. The single currency was lifted after Friday’s upbeat German and French business activity data and fresh assurances by Italian politicians that their nation would not leave the single currency.

The dollar index against a basket of six major currencies stood at 94.515 having retreated from 95.529, its highest level since July 2017 scaled early on Friday.

The greenback had climbed the 11-month peak as higher U.S. yields had underlined the divergence in monetary policies between the United States and Europe.

The dollar, however, began to sag towards the end of last week as U.S. yields lost their lift amid a heightening of trade tensions between Washington and the European Union.

U.S. President Donald Trump threatened on Friday to impose a 20 percent tariff on all cars imported from the European Union. The EU said it will have no choice but to retaliate to such a move.

“The euro is on a technical bounce but whether it can retain the uptrend depends on how the US-EU trade tensions pan out. The trade spat have helped drive down both U.S. and German debt yields, and both the euro and dollar could lose out if tensions intensify,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“The yen could end up the winner in such a case by attracting safety bids.”

The dollar was 0.1 percent lower at 109.905 yen after dipping to a six-day trough of 109.75 earlier in the session.

Commodity-linked currencies were well supported as crude oil prices surged after OPEC agreed on Friday to unexpectedly modest increase in production from next month after Saudi Arabia persuaded Iran to cooperate.

The Australian dollar was at $0.7436 after rallying 0.85 percent on Friday. The Canadian dollar was at C$1.3281 per dollar after advancing 0.4 percent on Friday and away from a one-year low of C$1.3384.

The Turkish lira was up more than 1 percent against the dollar after President Tayyip Erdogan and his ruling AK Party claimed victory in presidential and parliamentary elections on Sunday, overcoming the biggest electoral challenge to their rule in a decade and a half.

Turkey’s lira, which has lost about a fifth of its value against the dollar this year, firmed on hopes of a stable working relationship between the president and the parliament. (Reporting by Shinichi Saoshiro Editing by Eric Meijer)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below