* Euro recovers after being weighed by Brexit, Italy worries
* Canadian dollar falls to five-week lows
(Recasts with Brexit report, updates prices)
By Karen Brettell
NEW YORK, Oct 19 (Reuters) - The euro and British pound rallied
against the U.S. dollar on Friday after Bloomberg News reported that
British Prime Minister Theresa May is ready to drop a key Brexit
demand in order to make a deal for Britain to leave the European Union (EU).
May is willing to drop a requirement on the issue of the Irish
border, which has impeded the two parties coming to an agreement,
Bloomberg reported, citing anonymous sources.
EU negotiator Michel Barnier earlier said that a Brexit deal was
90 percent done, but warned that failure to resolve the Irish border
question could derail any agreement.
The euro and sterling have been burdened this week by delays in
the two parties reaching an exit deal.
The single currency gained to $1.1512, after earlier falling to
$1.1433 , the lowest since Oct. 9. It is down from $1.1621 on Tuesday.
The euro has good technical support at $1.1422-$1.1432, Citigroup
Sterling rose to $1.3067, after earlier probing a two-week low
Investors taking profits on bets against the euro before the
weekend also helped support the single currency on Friday.
“The market has added to shorts considerably during the week and
so I’m not surprised that the down move ended today,” said Greg
Anderson, global head of foreign exchange strategy for BMO Capital
Markets in New York, noting that traders are “taking profit on a short
that’s worked for them.”
Ongoing concerns about Italy’s spending proposals, however, are
likely to remain a negative for the currency.
The European Commission on Thursday sent Rome a letter calling a
draft budget an "unprecedented" breach of EU fiscal rules,
the first step of a procedure that could end with Brussels rejecting
the budget and fining Italy.
Canada’s dollar dropped to a five-week low after Canadian
inflation and retail sales data came in weaker than expected.
The data is seen as unlikely to divert the Bank of Canada from
raising interest rates again next week, though the inflation miss may
make the central bank less likely to take a more hawkish view when
“After the last meeting they discussed taking the word ‘gradual’
out of their communications and this cements ‘gradual’ will remain in
communications,” Anderson said.
U.S. data on Friday showed that U.S. home sales fell in September
by the most in over two years.
Currency bid prices at 1:24PM (1724 GMT)
Description RIC Last U.S. Close Pct Change
YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1512 $1.1452 +0.52%
-4.03% +1.1534 +1.1433
Dollar/Yen JPY= 112.5000 112.1800 +0.29%
-0.15% +112.6400 +112.1500
Euro/Yen EURJPY= 129.53 128.49 +0.81%
-4.18% +129.6600 +128.4700
Dollar/Swiss CHF= 0.9977 0.9955 +0.22%
+2.40% +0.9977 +0.9950
Sterling/Dollar GBP= 1.3067 1.3017 +0.38%
-3.29% +1.3103 +1.3012
Dollar/Canadian CAD= 1.3118 1.3085 +0.25%
+4.30% +1.3132 +1.3027
Australian/Doll AUD= 0.7122 0.7099 +0.32%
-8.70% +0.7149 +0.7090
Euro/Swiss EURCHF= 1.1486 1.1402 +0.74%
-1.74% +1.1491 +1.1392
Euro/Sterling EURGBP= 0.8810 0.8797 +0.15%
-0.82% +0.8832 +0.8776
NZ NZD= 0.6586 0.6541 +0.69%
-7.06% +0.6607 +0.6524
Dollar/Norway NOK= 8.2108 8.2756 -0.78%
+0.05% +8.2802 +8.2094
Euro/Norway EURNOK= 9.4545 9.4796 -0.26%
-4.00% +9.4872 +9.4420
Dollar/Sweden SEK= 8.9866 9.0408 -0.11%
+9.57% +9.0537 +8.9823
Euro/Sweden EURSEK= 10.3463 10.3581 -0.11%
+5.14% +10.3630 +10.3229
(Reporting by Karen Brettell; editing by Grant McCool)
((Karen.Brettell@thomsonreuters.com; +1 646 223 6274; Reuters