Euro dips on election concerns, trade tensions support dollar

(Adds Salvini comments, sterling and yuan moves, updates
By Karen Brettell
NEW YORK, May 16 (Reuters) - The euro dropped to its lowest
level in more than a week against the dollar on Thursday on
concerns about next week's European parliamentary elections,
while the dollar was buoyed by ongoing U.S.-China trade
The euro has been hurt in recent days by Italian Deputy
Prime Minister Matteo Salvini's comments that European Union
rules harm the country.
Salvini said on Thursday that he would "tear apart" rules
that are "strangling" Italy if his party scores well in a
European parliamentary election later this month.
"Italy remains one of the factors keeping euro downside
risks high," said Credit Agricole FX strategist Manuel Olivieri.
The dollar has benefited as a safe-haven currency even as
the United States and China remain locked in a trade dispute.
The euro was boosted on Wednesday by reports that U.S.
President Donald Trump is expected to delay a decision on
imposing tariffs on imported cars and parts by up to six months,
avoiding opening yet another front in his global trade battles.

Until a delay is official, however, investors remain nervous
about a new trade war and how it may affect the global economy.
"The major theme is, is there enough room to fight multiple
trade wars at once?" said Mark McCormick, North American head of
FX strategy at TD Securities in Toronto.
"We had some green shoots of global economic stabilization
the last five months and now I think the concern is whether or
not renewed trade wars will sap some of that confidence and
whether or not that, along with some of the slowdown we're
seeing in the U.S. economy, will tip the global economy back
into a less stable state," McCormick said.
The Chinese yuan weakened as far as 6.9299 against the
dollar on Thursday, its weakest level since Nov. 30.
The greenback was also bolstered on Thursday by data that
showed U.S. homebuilding increased more than expected in
April, while a Philadelphia Fed index of business conditions
gained in May.
The Australian dollar weakened to its lowest level since
Jan. 3 after data showed that the country's unemployment rate
rose to its highest in eight months, cementing views its central
bank may be forced to lower borrowing costs soon to stimulate
the economy.
Sterling dropped to the lowest level since Feb. 15 as
Britain's Prime Minister Theresa May battled to keep her Brexit
deal, and her premiership, intact amid growing fears of a
disorderly departure from the EU.

Currency bid prices at 1:47PM (1747 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Euro/Dollar EUR= $1.1176 $1.1200 -0.21% -2.55% +1.1225 +1.1173
Dollar/Yen JPY= 109.8000 109.5800 +0.20% -0.42% +109.9600 +109.3400
Euro/Yen EURJPY= 122.73 122.74 -0.01% -2.77% +122.9600 +122.5500
Dollar/Swiss CHF= 1.0094 1.0087 +0.07% +2.85% +1.0106 +1.0074
Sterling/Dollar GBP= 1.2802 1.2848 -0.36% +0.35% +1.2861 +1.2789
Dollar/Canadian CAD= 1.3441 1.3437 +0.03% -1.44% +1.3449 +1.3400
Australian/Doll AUD= 0.6894 0.6927 -0.48% -2.20% +0.6933 +0.6894
Euro/Swiss EURCHF= 1.1283 1.1296 -0.12% +0.26% +1.1317 +1.1283
Euro/Sterling EURGBP= 0.8730 0.8721 +0.10% -2.83% +0.8749 +0.8715
NZ NZD= 0.6540 0.6561 -0.32% -2.64% +0.6582 +0.6540
Dollar/Norway NOK= 8.7379 8.7141 +0.27% +1.15% +8.7412 +8.6830
Euro/Norway EURNOK= 9.7675 9.7633 +0.04% -1.40% +9.7780 +9.7347
Dollar/Sweden SEK= 9.6320 9.5991 +0.14% +7.45% +9.6343 +9.5780
Euro/Sweden EURSEK= 10.7682 10.7530 +0.14% +4.91% +10.7745 +10.7381

(Additional reporting by Abhinav Ramnarayan in London; editing
by Jonathan Oatis and Richard Chang)

First Published: 2019-05-16 02:32:53
Updated 2019-05-16 19:59:40

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