May 15, 2019 / 3:32 PM / 7 months ago

FOREX-Euro retraces losses on report auto tariffs will be delayed

 (Adds data, Trump on auto tariffs, updates prices)
    By Karen Brettell
    NEW YORK, May 15 (Reuters) - The euro retraced earlier
losses against the U.S. dollar on Wednesday after administration
officials said that U.S. President Donald Trump is expected to
delay a decision on tariffs on imported cars and parts by up to
six months.
    A formal announcement is expected by Saturday, the due date
for Trump to make a decision on recommendations by the Commerce
Department to protect the U.S. auto industry from imports on
national security grounds.
    “The assumption is that that’s going to delay any tariffs on
European autos, which has been the issue hanging over the
broader trade talks,” said Shaun Osborne, chief FX strategist at
Scotiabank in Toronto. 
    “Perhaps Trump has decided it’s best to wage a trade war on
one front only at the moment and concentrate on China,” Osborne
    The greenback has benefited from its safe-haven status even
as the United States and China remain locked in a trade war.
    Trump threatened higher tariffs on billions of dollars of
Chinese imports last week, and Beijing responded with planned
tariff hikes of its own on Monday.
    The euro had weakened earlier on Wednesday as Italy’s Deputy
Prime Minister Matteo Salvini criticized European Union rules
for the second day.
    "If there are European rules that are starving a continent,
these rules must be changed," Salvini said on Wednesday, a day
after he said the government was ready to breach EU rules that
seek to limit budget deficits and curb excessive debt.

    “There are definitely concerns heading into the European
elections next week that there could be some more rhetoric
against the EU,” said Erik Nelson, a currency strategist at
Wells Fargo in New York.
    Salvini’s comments overshadowed data showing Germany’s
economy returned to growth in the March quarter as householders
spent more freely and construction activity picked up.

    Safe-haven currencies including the Japanese yen and U.S.
dollar were also boosted after weak economic data in China
raised new concerns about growth there.
    China reported surprisingly weaker growth in retail sales
and industrial output for April, adding pressure on Beijing to
roll out more monetary stimulus as the trade war with the United
States escalates.
    “This data preceded the latest round of tariffs, so that’s a
bit worrying that even before this flared up we saw some
weakness,” Nelson said.
    U.S. data on Wednesday showed that U.S. retail sales
unexpectedly fell in April as households cut back on purchases
of motor vehicles and a range of other goods while U.S.
industrial production also dropped last month.
    Currency bid prices at 11:22AM (1522 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1200        $1.1203     -0.03%         -2.36%      +1.1224     +1.1178
 Dollar/Yen       JPY=        109.4900       109.5900    -0.09%         -0.70%      +109.7000   +109.1600
 Euro/Yen         EURJPY=     122.64         122.79      -0.12%         -2.84%      +123.0900   +122.1000
 Dollar/Swiss     CHF=        1.0085         1.0085      +0.00%         +2.76%      +1.0091     +1.0056
 Sterling/Dollar  GBP=        1.2864         1.2904      -0.31%         +0.84%      +1.2922     +1.2827
 Dollar/Canadian  CAD=        1.3449         1.3459      -0.07%         -1.38%      +1.3493     +1.3441
 Australian/Doll  AUD=        0.6926         0.6941      -0.22%         -1.76%      +0.6947     +0.6915
 Euro/Swiss       EURCHF=     1.1296         1.1301      -0.04%         +0.36%      +1.1313     +1.1265
 Euro/Sterling    EURGBP=     0.8704         0.8680      +0.28%         -3.12%      +0.8737     +0.8669
 NZ               NZD=        0.6557         0.6574      -0.26%         -2.38%      +0.6577     +0.6551
 Dollar/Norway    NOK=        8.7247         8.7442      -0.22%         +1.00%      +8.7628     +8.7098
 Euro/Norway      EURNOK=     9.7744         9.7983      -0.24%         -1.33%      +9.8186     +9.7705
 Dollar/Sweden    SEK=        9.6068         9.6022      +0.00%         +7.17%      +9.6383     +9.5775
 Euro/Sweden      EURSEK=     10.7618        10.7615     +0.00%         +4.85%      +10.7822    +10.7470
 (Additional reporting by Abhinav Ramnarayan and Saikat
Chatterjee in London; Editing by Bernadette Baum and James
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