May 14, 2019 / 1:30 PM / 2 months ago

FOREX-Italian concerns weigh down euro after Salvini comments

    * Italy's Salvini says may break EU rules
    * Trump says trade deal with China still likely 
    * Sterling slips on weak wage growth 

 (New throughout, updates trading and comments to U.S. market
open, new byline, changes dateline, previous LONDON)
    By Karen Brettell
    NEW YORK, May 14 (Reuters) - The euro slid against the
dollar on Tuesday after Italy’s deputy prime minister said the
country is ready to break European Union budget rules if
necessary to spur employment.
    "If we need to break some limits, like the 3%
(deficit-to-GDP ratio) or 130-140% (debt-to-GDP ratio), we're
ready to go ahead. Until we arrive at 5% unemployment, we will
spend everything that we should and if someone in Brussels
complains, that won't be our concern," Matteo Salvini said.

    “There are renewed Italian concerns,” said Win Thin, global
head of currency strategy at Brown Brothers Harriman in New
York. “It looks like things are coming back to a head.”
    The dollar was also buoyed as U.S. and Chinese officials
said the two countries would continue to negotiate on trade.
    U.S. President Donald Trump on Tuesday defended his trade
war with China as tensions escalated and markets extended their
losses, promising a deal with Chinese President Xi Jinping soon,
even as fears escalated about a protracted battle.
    Continuing uncertainty over whether an agreement is likely
should support safe-haven currencies, including the dollar and
the Japanese yen, said Thin.
    “There is too much uncertainty," Thin said. "I think things
will get worse before they get better.”
    Investors are also focused on whether Trump will impose
tariffs on imported cars and auto parts as talks continue with
the EU and Japan.
    Trump received a "Section 232" investigation report in
February, widely believed to have concluded that car and auto
part imports pose a risk to national security. The president's
90-day deliberation period is due to end on
    Sterling dipped to two-week lows as British employment data
showed wage growth in the quarter ending March was lower than
expected, signaling the possible start of a turbulent period for
the broader economy.
    The British currency is also being weighed down by concerns
about Britain’s exit from the European Union.
    Britain's opposition Labour Party said on Tuesday that Prime
Minister Theresa May had not yet made a shift in Brexit talks
and that the party was concerned a future Conservative leader
could renege on any promises made by the current government.

    Currency bid prices at 8:20AM (1220 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1212        $1.1223     -0.10%         -2.24%      +1.1246     +1.1209
 Dollar/Yen       JPY=        109.5500       109.3000    +0.23%         -0.64%      +109.7700   +109.1500
 Euro/Yen         EURJPY=     122.82         122.64      +0.15%         -2.69%      +123.3900   +122.5900
 Dollar/Swiss     CHF=        1.0075         1.0063      +0.12%         +2.66%      +1.0085     +1.0052
 Sterling/Dollar  GBP=        1.2933         1.2955      -0.17%         +1.38%      +1.2970     +1.2924
 Dollar/Canadian  CAD=        1.3473         1.3475      -0.01%         -1.20%      +1.3487     +1.3455
 Australian/Doll  AUD=        0.6941         0.6943      -0.03%         -1.52%      +0.6959     +0.6940
 Euro/Swiss       EURCHF=     1.1298         1.1294      +0.04%         +0.39%      +1.1329     +1.1289
 Euro/Sterling    EURGBP=     0.8668         0.8659      +0.10%         -3.53%      +0.8691     +0.8655
 NZ               NZD=        0.6577         0.6566      +0.17%         -2.08%      +0.6590     +0.6565
 Dollar/Norway    NOK=        8.7379         8.7678      -0.34%         +1.15%      +8.7707     +8.7195
 Euro/Norway      EURNOK=     9.8006         9.8375      -0.38%         -1.06%      +9.8496     +9.7956
 Dollar/Sweden    SEK=        9.6139         9.6354      -0.33%         +7.25%      +9.6448     +9.5857
 Euro/Sweden      EURSEK=     10.7803        10.8160     -0.33%         +5.03%      +10.8260    +10.7710

 (Reporting by Karen Brettell; editing by Jonathan Oatis)
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