Euro bounces on expectations Trump will delay auto tariffs

Written by on May 16, 2019

FILE PHOTO: New 20 Euro banknotes are presented at the Austrian national bank in Vienna
FILE PHOTO: New 20 Euro banknotes are presented at the Austrian national bank in Vienna February 24, 2015. REUTERS/Leonhard Foeger/File Photo

May 16, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – The euro was buoyant on Thursday as trade concerns eased on expectations that U.S. President Donald Trump will delay implementing tariffs on imported cars.

Trump administration officials told Reuters on Wednesday that the president is expected to put off a decision on imposing tariffs on imported cars and parts by up to six months, for now preventing a further increase in transatlantic trade tensions.

The euro was 0.05% higher at $1.1207, having bounced overnight from a one-week low of $1.1178. The single currency was initially hit as Italy’s Deputy Prime Minister Matteo Salvini criticized European Union rules for the second day.

“Long term prospects for the euro are not particularly bright, given the region’s soft economic fundamentals. But the news on the auto tariff delay is helping the euro establish support at the $1.1200 threshold,” said Shin Kadota, senior strategist at Barclays in Tokyo.

The dollar traded little changed at 109.500 yen.

The greenback had retreated to a low of 109.150 against the safe-haven yen on Wednesday as U.S. yields slid on weak U.S. April retail sales and industrial output data. China had also reported surprisingly weaker growth in retail sales and industrial output for April, denting riskier assets.

But the U.S. currency retraced its losses against the yen as trade tensions softened.

The dollar index against a basket of six major currencies was nearly flat at 97.542 after posting modest gains the previous day.

The Australian dollar nudged down 0.1% to $0.6922, staying within touching distance of a 4-1/2-month low of $0.6915 touched the previous day on weak domestic wages data and soft Chinese economic indicators.

Immediate focus for the Aussie was on the Australian employment data due at 0130 GMT.

(Graphic: World FX rates in 2019 – http://tmsnrt.rs/2egbfVh)

(Editing by Shri Navaratnam)

Source: OANN

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