* Euro hits day's high on views ECB may speed up rate hike cycle
* Canadian dollar strengthens after central bank raises rates
* U.S. threatens 10 percent tariffs on $200 bln of Chinese imports
(Adds analyst comment; updates prices; changes dateline; previous LONDON)
By Kate Duguid
NEW YORK, July 11 (Reuters) - The euro rose to a daily high on
Wednesday after a report that European Central Bank policymakers were
split over when the central bank would raise rates next year.
Sources told Reuters that some policymakers said an increase was
possible as early as July 2019, while others ruled out a move until
autumn next year.
"(The ECB) is really talking about whether they raise rates
in July or at some point in the months after that," said Shaun
Osborne, chief FX strategist at Scotia Capital in Toronto.
The single currency rose 0.6 percent against the dollar to a
top of $1.176 after having fallen earlier in the day. The euro's move
drove the dollar index , which measures the currency against a
basket of six rivals, down 0.4 percent to a daily trough of 94.091.
The euro also strengthened against the pound , rising to a day's
high of 88.60 pence.
The ECB said last month it expected to keep rates at its current,
record-low levels "through the summer" of 2019, wording
vague enough to leave the exact meaning open to debate.
Against the dollar, the euro had fallen in early trade after
Washington threatened 10 percent tariffs on $200 billion worth of
Chinese imports in an escalating trade conflict that has heightened
worries that the euro zone economy could be hurt.
The biggest losers were the Chinese yuan , which skidded toward
an 11-month low, and the Australian dollar
, which fell as much as 1.1 percent. An increase of Sino-U.S. trade
tensions would have the biggest impact in China and in Asia, where
countries, including Australia, depend on Chinese demand for their
The news of more possible tariffs comes days after Washington
imposed 25 percent tariffs on $34 billion of Chinese imports, and
Beijing responded immediately with matching tariffs on the same amount
of U.S. exports to China.
The Canadian dollar strengthened 0.8 percent to C$1.306
after the Bank of Canada increased interest rates as expected. It
said further gradual rate hikes would be warranted, but warned about
the economic effects of mounting trade tensions.
"The rate hike was not at all surprising. The markets were,
however, expecting a dovish hike and we haven't got that... That
accounts for the rally we've seen in the Canadian dollar," said
"The initial headlines from the bank are... downplaying some
of the big concerns they've had with regard to the domestic economy,
trade and housing," he said.
(Reporting by Kate Duguid; Additional reporting by Tommy Wilkes and
Saikat Chatterjee; Editing by Jane Merriman and Dan Grebler)
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