February 21, 2019 / 8:12 PM / a month ago

FOREX-Dollar gains in light trade as impact of soft U.S. data eases

    * U.S. economic data disappoints, weighs on dollar
    * Euro helped by firm euro zone business activity
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Recasts, adds comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Feb 21 (Reuters) - The dollar on Thursday
recovered from earlier losses spurred by soft U.S. economic
data, as investors consolidated positions and looked for fresh
trading incentives amid U.S.-China trade negotiations and talks
related to Britain's exit from the European Union.
    The greenback earlier fell, hurt by weaker-than-expected
U.S. economic data that affirmed expectations the Federal
Reserve will hold U.S. interest rates steady this year.
    "We had weak U.S. data earlier that pushed the dollar lower,
but now that move is over," said John Doyle, vice president of
dealing and trading at Tempus Inc. in Washington.
    "Right now, we're kind of stuck in some boring, tight
ranges. We were kind of hoping for some events to shake things
loose, but that didn't really happen and we're sort of looking
for the next driver," he added. 
    Doyle noted that those drivers could very well be related to
developments on U.S.-China trade talks and Brexit negotiations.
    The U.S. data came a day after minutes of the Fed's monetary
policy last month said patience was needed when it came to
tightening rates, noting a pause in rate hikes gave it time to
observe the effects of past increases amid a global economic
slowdown.
    New orders for U.S.-made capital goods, in particular,
unexpectedly fell in December, data showed on Thursday, amid
declining demand for machinery and primary metals, pointing to
sluggish business spending on equipment that could crimp
economic growth.
    "Overall, the durable goods data provide further reason to
think that economic growth will soon slow to below its 2 percent
potential pace, which will keep the Fed on hold throughout this
year," said Andrew Hunter, senior U.S. economist, at Capital
Economics in London.
    Thursday's data also showed that the Philadelphia Fed's
manufacturing activity index dropped to a reading of -4.1 this
month from 17.0 in January. That was the first negative reading
since May 2016.
    In afternoon trading, the dollar index, a gauge of its value
 against a basket of six major currencies, was up 0.2 percent at
96.611.
    The dollar, however, fell 0.2 percent against the yen to
110.69 yen, sliding for the first time in five days. 
    But the greenback gained against the Swiss franc and
sterling.
    The euro, meanwhile, was little changed versus the dollar,
at $1.1343, earlier rising after surveys showed business
activity was surprisingly firm in February, particularly in
France.
    French business activity rose more than expected, though the
German PMI number was more of a mixed picture.
    A bunch of weak data since January has undermined support
for the euro, prompting investors to revise down their inflation
expectations for the coming months, and pulled core bond yields
lower.
    A Citibank economic surprise index shows the euro zone
indicator is still wallowing near six-month lows hit last month.

    ========================================================
    Currency bid prices at 3:01PM (2001 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1331        $1.1335     -0.04%         -1.20%      +1.1366     +1.1321
 Dollar/Yen       JPY=        110.6800       110.8500    -0.15%         +0.38%      +110.8700   +110.5800
 Euro/Yen         EURJPY=     125.44         125.67      -0.18%         -0.62%      +125.8500   +125.3300
 Dollar/Swiss     CHF=        1.0012         1.0008      +0.04%         +2.02%      +1.0022     +0.9995
 Sterling/Dollar  GBP=        1.3035         1.3049      -0.11%         +2.18%      +1.3094     +1.3027
 Dollar/Canadian  CAD=        1.3225         1.3174      +0.39%         -3.02%      +1.3231     +1.3162
 Australian/Doll  AUD=        0.7078         0.7163      -1.19%         +0.41%      +0.7207     +0.7072
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1348         1.1349      -0.01%         +0.84%      +1.1368     +1.1342
 Euro/Sterling    EURGBP=     0.8693         0.8685      +0.09%         -3.24%      +0.8703     +0.8666
 NZ               NZD=        0.6804         0.6855      -0.74%         +1.30%      +0.6876     +0.6798
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.6340         8.5895      +0.52%         -0.05%      +8.6441     +8.5813
 Euro/Norway      EURNOK=     9.7861         9.7382      +0.49%         -1.21%      +9.7914     +9.7368
 Dollar/Sweden    SEK=        9.3699         9.3203      +0.48%         +4.53%      +9.3729     +9.3034
 Euro/Sweden      EURSEK=     10.6200        10.5692     +0.48%         +3.47%      +10.6311    +10.5591
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette
Baum and James Dalgleish)
  
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