* Italy may break EU budget rules, deputy prime minister says
* Trump says trade deal with China still likely
* Sterling slips on weak wage growth
(Adds Di Maio comments, updates prices)
By Karen Brettell
NEW YORK, May 14 (Reuters) - The euro slid against the dollar on
Tuesday after Italy’s deputy prime minister said the country is ready
to break European Union budget rules on debt levels if necessary to
"If we need to break some limits, like the 3% (deficit-to-GDP
ratio) or 130-140% (debt-to-GDP ratio), we're ready to go ahead,"
Matteo Salvini, Italy's deputy prime minister, said. "Until we
arrive at 5% unemployment, we will spend everything that we should and
if someone in Brussels complains, that won't be our concern."
Win Thin, global head of currency strategy at Brown Brothers
Harriman in New York, said "renewed Italian concerns" were
affecting the market.
Salvini's coalition partner, Luigi Di Maio, later told reporters
that it was "pretty irresponsible" to create market tensions
by speaking about increasing Italy's high debt level.
The dollar was also buoyed as U.S. and Chinese officials said the
two countries would continue to negotiate on trade.
U.S. President Donald Trump insisted on Tuesday that trade talks
with China had not collapsed and called the widening U.S.-China tariff
war "a little squabble," even as his administration readies
25% duties on all remaining Chinese imports.
Continuing uncertainty over whether an agreement is likely should
support safe-haven currencies, including the dollar and the Japanese
yen, Thin said.
“There is too much uncertainty," Thin said. "I think
things will get worse before they get better.”
Investors are also focused on whether Trump will impose tariffs on
imported cars and auto parts as talks continue with the European Union
Trump received a "Section 232" investigation report in
February, widely believed to have concluded that car and auto part
imports pose a risk to national security. The president's 90-day
deliberation period is due to end on Saturday.
Sterling dipped to two-week lows as British employment data showed
wage growth in the quarter ending March was lower than expected,
signaling the possible start of a turbulent period for the broader
economy. Concerns about Britain’s exit from the European Union are
also weighing on the British currency.
Britain's opposition Labour Party said on Tuesday that Prime
Minister Theresa May had not yet made a shift in Brexit talks and that
the party was concerned a future Conservative leader could renege on
any promises made by the current government.
Currency bid prices at 8:20AM (1220 GMT)
Description RIC Last U.S. Close Pct Change
YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1212 $1.1223 -0.10%
-2.24% +1.1246 +1.1209
Dollar/Yen JPY= 109.5500 109.3000 +0.23%
-0.64% +109.7700 +109.1500
Euro/Yen EURJPY= 122.82 122.64 +0.15%
-2.69% +123.3900 +122.5900
Dollar/Swiss CHF= 1.0075 1.0063 +0.12%
+2.66% +1.0085 +1.0052
Sterling/Dollar GBP= 1.2933 1.2955 -0.17%
+1.38% +1.2970 +1.2924
Dollar/Canadian CAD= 1.3473 1.3475 -0.01%
-1.20% +1.3487 +1.3455
Australian/Doll AUD= 0.6941 0.6943 -0.03%
-1.52% +0.6959 +0.6940
Euro/Swiss EURCHF= 1.1298 1.1294 +0.04%
+0.39% +1.1329 +1.1289
Euro/Sterling EURGBP= 0.8668 0.8659 +0.10%
-3.53% +0.8691 +0.8655
NZ NZD= 0.6577 0.6566 +0.17%
-2.08% +0.6590 +0.6565
Dollar/Norway NOK= 8.7379 8.7678 -0.34%
+1.15% +8.7707 +8.7195
Euro/Norway EURNOK= 9.8006 9.8375 -0.38%
-1.06% +9.8496 +9.7956
Dollar/Sweden SEK= 9.6139 9.6354 -0.33%
+7.25% +9.6448 +9.5857
Euro/Sweden EURSEK= 10.7803 10.8160 -0.33%
+5.03% +10.8260 +10.7710
(Reporting by Karen Brettell; editing by Jonathan Oatis and Leslie Adler)
((Karen.Brettell@thomsonreuters.com; +1 646 223 6274; Reuters