China trade data props euro above three-month lows
The euro held above a three-month low on Thursday as improved Chinese trade data and hopes of progress in China-U.S. trade talks lifted risk sentiment, with the Australian dollar leading gains by more than half a percent.
Even economic data showing Germany’s economy stalled in the fourth quarter of 2018 failed to pull the euro lower. Traders said the nearly 2 percent drop by the euro in the first six weeks of the year may have been overdone.
“There is already a lot of bad news priced into the euro at these levels,” said Kenneth Broux, a currency strategist at Societe Generale in London.
Massive option expiries amounting to $1.2 billion around $1.13 were expected to keep the euro spot market in a tight range.
Risk appetite grew after China reported dollar-denominated exports rose 9.1 percent in January from a year earlier and imports dropped 1.5 percent.
The strong trade data fuelled gains by the Chinese currency in the offshore market. The yuan gained a quarter of a percent to 6.7635.
The Australian dollar, a barometer for global risk appetite, was up 0.6 percent at $0.7132 and on track for its best three-day rising streak so far this year.
Bloomberg reported President Donald Trump was considering pushing back by 60 days a March 1 deadline for resolving trade disputes with China, citing people familiar with the matter. On Wednesday, Trump had said the talks were “going along very well”. and
Elsewhere, German data showed its economy stalled in the final quarter of 2018, narrowly avoiding recession. But the numbers were in line with forecasts and weak eurozone GDP data for the quarter had already tempered expectations.
The euro up at $1.1268 and just above a three-month low of $1.1248.
Source: Reuters (Reporting by Saikat Chatterjee; editing by Larry King)