December 14, 2018 / 4:35 PM / a month ago

FOREX-Dollar hits 19-month peak on gloom outside U.S.

    * Weak German, French PMIs stoke selling in euros
    * Yuan falters on dour Chinese retail sales, industrial data
    * Worries about Brexit deal knocks down sterling 
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Dec 14 (Reuters) - The dollar shone on Friday,
reaching a 19-month high against a basket of currencies, as
investors preferred the safety of the world's reserve currency
in the wake of worrisome political and economic news outside the
United States.
    The Chinese yuan fell after data showed retail sales
grew in November at their slowest pace since 2003 and industrial
output rose the least in nearly three years. The
offshore yuan shed 0.38 percent at 6.9038 per dollar.
    The euro weakened as the euro zone economy showed more signs
of a slowdown.
    Sterling tumbled as traders worried British Prime Minister
Theresa May was struggling to secure assurances from the EU over
her Brexit withdrawal deal.
    "The dollar is not so much rallying as much as everyone else
is falling," said Boris Schlossberg, managing director of FX
strategy at BK Asset Management in New York.
    An index that tracks the greenback versus six major peers
 hit its highest level since May 2017 at 97.711. At 11:02
a.m. (1602 GMT), it was up 0.49 percent at 97.536.
    The greenback's appeal increased in the aftermath of upbeat
data on domestic retail sales and industrial output.

    The dollar's gains were limited by bets the Federal Reserve
might reduce the number of interest rate increases after a
widely expected hike next week.
    The futures market implied traders saw an 82 percent chance 
the U.S. central bank would increase key short-term rates by a
quarter point to 2.25-2.50 percent at its policy meeting next
Tuesday and Wednesday, up from 79 percent on Thursday, according
to CME Group's FedWatch program.
    "The market is skeptical about the U.S. economy and whether
the Fed would hike further after December," Schlossberg said.
    The greenback was also held back by the probability of a
partial government shutdown as U.S. President Donald Trump and
federal lawmakers disagree over funding for a border wall,
analysts said.
    The euro was down 0.5 percent at $1.12965 after German data
showed private-sector expansion slowed to a four-year low in
December. French business activity unexpectedly contracted,
further fanning fears about slowing growth in the euro area.

    Worries about the European economy were also stoked by
uncertainty whether May could convince the British parliament to
approve her Brexit deal.
    The pound was 0.79 percent lower at $1.256, holding above a
20-month low of $1.2477 reached on Wednesday. 
========================================================
    Currency bid prices at 11:04AM (1604 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1296        $1.1361     -0.57%         -5.84%      +1.1371     +1.1270
 Dollar/Yen       JPY=        113.4400       113.6200    -0.16%         +0.68%      +113.6800   +113.4000
 Euro/Yen         EURJPY=     128.14         129.03      -0.69%         -5.21%      +129.1200   +128.0700
 Dollar/Swiss     CHF=        0.9966         0.9940      +0.26%         +2.29%      +0.9983     +0.9932
 Sterling/Dollar  GBP=        1.2558         1.2655      -0.77%         -7.06%      +1.2674     +1.2531
 Dollar/Canadian  CAD=        1.3373         1.3350      +0.17%         +6.33%      +1.3401     +1.3347
 Australian/Doll  AUD=        0.7171         0.7226      -0.76%         -8.08%      +0.7228     +0.7152
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1256         1.1287      -0.27%         -3.70%      +1.1295     +1.1243
 Euro/Sterling    EURGBP=     0.8992         0.8974      +0.20%         +1.23%      +0.9006     +0.8961
 NZ Dollar/Dolar  NZD=        0.6802         0.6856      -0.79%         -4.01%      +0.6862     +0.6779
 Dollar/Norway    NOK=        8.6190         8.5552      +0.75%         +5.02%      +8.6337     +8.5507
 Euro/Norway      EURNOK=     9.7360         9.7232      +0.13%         -1.14%      +9.7479     +9.7158
 Dollar/Sweden    SEK=        9.0682         9.0551      -0.42%         +10.56%     +9.1164     +9.0532
 Euro/Sweden      EURSEK=     10.2437        10.2871     -0.42%         +4.11%      +10.3114    +10.2420
    
    

 (Additional reporting by Tommy Wilkes in LONDON 
Editing by Hugh Lawson and Chizu Nomiyama)
  
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