June 4, 2018 / 2:39 PM / 15 days ago

FOREX-Dollar sinks to 2-week low on renewed trade concerns, easing Italy risks

    * Euro rises past $1.17 as Italy risks subside, risk
sentiment up
    * Dollar down despite Friday's strong U.S. jobs report
    * Australian dollar surges with biggest one-day gain since
August
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (New throughout, updates prices, market activity, FX table and
comments; new byline, changes dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 4 (Reuters) - The dollar fell to a two-week
low on Monday, as the easing of political tensions in Italy
lifted the euro and as global trade concerns resurfaced after
China warned the United States against tariffs or other
protectionist measures.
    "With European political drama retreating from the brink,
the peak in the dollar index was likely observed at 95," said
Mazen Issa, senior FX strategist, at TD Securities in New York.
    Lingering trade disputes will also contribute to a
challenging backdrop for the U.S. dollar in the weeks ahead, he
added.
    "The U.S. administration appears uncoordinated and
unprepared with a global effort - that now includes China -
throwing its hat in the ring of retaliation and withdrawal of a
principled agreement to buy more U.S. goods should the U.S.
decide to go through with purported tariffs later this month,"
Issa said.
    The official Chinese news agency Xinhua reported on Sunday
that if the United States introduces trade sanctions including
raising tariffs, all the economic and trade achievements
negotiated by the two parties a few weeks ago will be void.

    In mid-morning trading, the dollar index fell 0.4 percent to
93.850, hitting a two-week trough of 93.664.
    The dollar fell on Friday despite a strong U.S. non-farm
payrolls report, suggesting the greenback has been looking
stretched after gaining consistently since mid-April.
    Better-than-expected U.S. jobs data last week underlined the
strength of the U.S. economy and the near-certainty of a Federal
Reserve interest rate rise this month and probably a fourth hike
this year, factors which have lifted the dollar.
 
    But the euro clawed back some gains as Italy took steps to
form a new government and as German Chancellor Angela Merkel
said over the weekend that Germany favored moves toward a
European Monetary Fund.
    The single currency was last up 0.5 percent at $1.1720,
after rising as high as $1.1737, its highest since May
24, pulling further away from 2018 lows of $1.151 last week.
    The Australian dollar surged to its highest since April on
an improvement in broader risk sentiment and domestic data
showing strong company profits and a rise in retail sales. 
    The Aussie rose to US$0.7651, on track for its
biggest one day-rise since August.
    
    ========================================================
    Currency bid prices at 10:17AM (1417 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1722        $1.1660     +0.53%         -2.28%      +1.1744     +1.1653
 Dollar/Yen       JPY=        109.4900       109.5300    -0.04%         -2.82%      +109.7600   +109.3800
 Euro/Yen         EURJPY=     128.38         127.69      +0.54%         -5.04%      +128.6800   +127.5900
 Dollar/Swiss     CHF=        0.9854         0.9880      -0.26%         +1.14%      +0.9894     +0.9831
 Sterling/Dollar  GBP=        1.3362         1.3347      +0.11%         -1.11%      +1.3399     +1.3338
 Dollar/Canadian  CAD=        1.2919         1.2947      -0.22%         +2.72%      +1.2964     +1.2900
 Australian/Doll  AUD=        0.7650         0.7566      +1.11%         -1.94%      +0.7666     +0.7557
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1551         1.1515      +0.31%         -1.18%      +1.1555     +1.1523
 Euro/Sterling    EURGBP=     0.8773         0.8738      +0.40%         -1.24%      +0.8773     +0.8733
 NZ Dollar/Dolar  NZD=        0.7039         0.6981      +0.83%         -0.66%      +0.7048     +0.6978
 Dollar/Norway    NOK=        8.1042         8.1805      -0.93%         -1.25%      +8.1942     +8.0920
 Euro/Norway      EURNOK=     9.5016         9.5417      -0.42%         -3.52%      +9.5504     +9.4926
 Dollar/Sweden    SEK=        8.7457         8.8238      -0.36%         +6.63%      +8.8285     +8.7353
 Euro/Sweden      EURSEK=     10.2550        10.2920     -0.36%         +4.23%      +10.2953    +10.2459
 
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Tommy Wilkes in London; Editing by David Gregorio)
  
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