* Graphic: World FX rates in 2019
(Recast; adds import news; updates prices; changes dateline from
LONDON to NEW YORK)
By Kate Duguid
NEW YORK, Feb 15 (Reuters) - The U.S. dollar was modestly higher
on Friday morning, steadying after it whipsawed following a report
showing import price data weakened for the third straight month in
January, the latest sign of weak inflation pressures.
The dollar index , which measures the currency against a basket
of six rivals, was 0.2 percent higher, recovering after a week that
included several weak data reports, including dismal U.S. retail
sales. Major currencies remained range-bound as the market awaited
developments in trade talks between Washington and Beijing.
The Labor Department said on Friday that import prices decreased
0.5 percent last month as petroleum product costs fell and a strong
dollar curbed prices for motor vehicles and consumer goods, leading to
the largest annual drop in nearly 2-1/2 years.
After rising 1.6 percent so far in February, the dollar fell
broadly on Thursday when poor U.S. retail sales suggested a sharp
slowdown in economic activity at the end of 2018.
"Calling the next move in the dollar is pretty tough right
now. The start of the year saw investors move into undervalued risk
assets, but right now the mood is shifting toward one of secular
stagnation," said Chris Turner, head of foreign exchange strategy
The results of a meeting on Friday between U.S. Treasury Secretary
Steve Mnuchin and Chinese President Xi Jinping is also in focus for
foreign exchange investors.
Earlier in the week, markets cheered U.S. President Donald Trump's
upbeat assessment of the talks, but a lack of progress since then has
bred a risk-off mood causing declines in the Australian dollar, a
proxy for China risk.
Any bad news out of the trade discussions on Friday could push the
dollar back up, given investor demand for safe-haven assets during
uncertain times, Turner said.
The euro extended its fall to a three-month low after Benoit
Coeure, a member of the European Central Bank's executive board, said
a new round of cheap multiyear loans to banks was possible. Coeure
added that the euro zone's recent economic slowdown is more pronounced
than earlier expected, suggesting the path of inflation will also be
The single currency was headed for a second week of losses and
was down 1.7 percent year to date on weaker-than-expected euro zone
Elsewhere, sterling was broadly flat at $1.28 after British
Prime Minister Theresa May on Thursday suffered a largely symbolic
defeat on her Brexit strategy.
(Reporting by Kate Duguid in York and Tom Finn in London; Editing by
((firstname.lastname@example.org; +646-223-6118; Reuters Messaging: email@example.com@thomsonreuters.net))