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FOREX-Dollar gains in light trade as impact of soft U.S. data eases
Published at 21/02/2019 at 20:08

* U.S. economic data disappoints, weighs on dollar

* Euro helped by firm euro zone business activity

* Graphic: World FX rates in 2019

(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

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Citi Economic Surprise Index

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette Baum and James Dalgleish)

((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters Messaging: rm://gertrude.chavez.reuters.com@reuters.net))