Home News FOREX-Euro dips on downbeat German business morale; Aussie rebounds – Kitco News

FOREX-Euro dips on downbeat German business morale; Aussie rebounds – Kitco News

4 min read

* Investors watching Germany’s Ifo business climate index

* Dollar shored up following surge in Treasury yields

* Aussie manages to reverse part of previous day’s decline

*(Adds detail on Germany survey, chart)

By Tom Finn and Saikat Chatterjee

LONDON, Feb 22 (Reuters) – The euro dipped on Friday after a
survey showed German business morale fell for the sixth month in
a row, while the Australian dollar rebounded after China denied
it had banned imports of the country’s coal.

Weak data since January has undermined support for the euro,
which edged lower but remained in positive territory against the
dollar at $1.1351. It hit a two-week high of $1.1371
on Wednesday, helped by hopes for an easing of the U.S.-China
trade conflict.

Analysts assessing the euro’s prospects are focused on
whether a slowdown in European growth is likely to be
protracted. A survey on Friday showed business morale fell in
February for a sixth straight month in Germany, the mainspring
of the European economy "In the end, it is mainly the prospect of the stuttering
growth driver Germany that is contributing to the uncertainty
regarding the EUR outlook," said Esther Reichelt, an FX
strategist at Commerzbank in Frankfurt.

Traders will scrutinise comments by European Central Bank
President Mario Draghi later on Friday, especially if he
elaborates on plans for further monetary policy easing.

The Australian dollar rebounded after tumbling more than 1
percent on Thursday, when Reuters reported the Chinese port of
Dalian had banned imports of Australian coal indefinitely. China
said on Friday imports would continue, but customs has stepped
up checks on foreign cargoes. That saw the Aussie rise to the day’s high of $0.7117, up 0.3 percent on the day.

The dollar traded flat against a basket of major currencies.
Thursday’s U.S. economic data showed an unexpected decline in
core capital goods orders, bolstering expectations the Federal
Reserve will keep interest rates steady.

Investors continue to watch high-level talks between U.S.
and Chinese trade negotiators in Washington. Just over a week is
left before a U.S.-imposed deadline for an agreement expires,
triggering higher tariffs.

With the economic outlook foggy and major central banks much
more accommodative compared with a few months ago, U.S.-China
trade talks and Brexit are the primary concerns for traders.

(Additional reporting by Shinichi Saoshiro in Tokyo, editing by
Larry King)


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