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FOREX-Dollar dips modestly as trade, data in focus
Published at 11/06/2019 at 19:24

(Adds Trump comments, updates prices)

By Karen Brettell

NEW YORK, June 11 (Reuters) - The U.S. dollar index dropped slightly on Tuesday as investors focused on the U.S.-China trade war and economic data for signals of growth and whether the U.S. Federal Reserve is likely to cut rates in the coming months.

Risk sentiment improved on Monday, after the United States reached a deal with Mexico on Friday to avoid imposing tariffs on the country.

Ongoing tensions between the U.S. and China and the prospect that U.S. President Donald Trump will look to impose tariffs on Japan and Europe, however, continues to weigh on risk sentiment.

Investors are concerned that trade wars are harming global growth, and increasing the likelihood that the U.S. central bank will need to cut rates to stimulate growth.

Data on Tuesday showed that U.S. producer prices rose for a second straight month in May, though price pressures remained tepid.

“It certainly plays into the dovish Fed story,” said Win Thin, global head of currency strategy at Brown Brothers Harriman in New York.

Consumer Price Index data on Wednesday, which is closely watched by the Federal Reserve, is the next inflation indicator. Retail sales on Friday will also be closely watched for indications on whether tariffs are slowing the economy.

“We know we are in a low inflation environment right now, but the question is what is the U.S. story in terms of growth,” said Thin.

This month's G20 summit will help push U.S-China trade talks forward but no final agreement was expected to be reached there, U.S. Commerce Secretary Wilbur Ross said on Tuesday.

Trump on Monday said he was ready to impose another round of punitive tariffs on Chinese imports if he cannot make progress in trade talks.

He added on Tuesday that Beijing needed to reverse its decision to reject some of the previously negotiated steps on trade.

Trump also accused Europe of devaluing the euro zone's single currency in a series of tweets that also targeted U.S. monetary policy with renewed attacks on the U.S. central bank.

"The Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage," Trump tweeted without offering any evidence. He also slammed U.S. interest rates for being too high.

Interest rate futures traders are pricing in an almost 80 percent chance of a rate decrease at the Fed's July meeting, according to the CME Group's FedWatch Tool.

========================================================

Currency bid prices at 2:08PM (1808 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1333 $1.1312 +0.19% -1.19% +1.1337 +1.1303

Dollar/Yen JPY= 108.4500 108.4300 +0.02% -1.64% +108.7900 +108.3600

Euro/Yen EURJPY= 122.92 122.66 +0.21% -2.61% +123.1400 +122.6300

Dollar/Swiss CHF= 0.9913 0.9896 +0.17% +1.01% +0.9936 +0.9893

Sterling/Dollar GBP= 1.2728 1.2683 +0.35% -0.23% +1.2729 +1.2671

Dollar/Canadian CAD= 1.3277 1.3265 +0.09% -2.64% +1.3308 +1.3250

Australian/Doll AUD= 0.6964 0.6961 +0.04% -1.19% +0.6966 +0.6948

ar

Euro/Swiss EURCHF= 1.1234 1.1196 +0.34% -0.16% +1.1242 +1.1192

Euro/Sterling EURGBP= 0.8903 0.8916 -0.15% -0.91% +0.8932 +0.8891

NZ NZD= 0.6589 0.6607 -0.27% -1.91% +0.6611 +0.6570

Dollar/Dollar

Dollar/Norway NOK= 8.6175 8.6552 -0.44% -0.25% +8.6852 +8.6166

Euro/Norway EURNOK= 9.7694 9.7938 -0.25% -1.38% +9.8311 +9.7576

Dollar/Sweden SEK= 9.4339 9.4169 +0.39% +5.25% +9.4529 +9.4064

Euro/Sweden EURSEK= 10.6943 10.6530 +0.39% +4.19% +10.6970 +10.6502

(Editing by Chizu Nomiyama)

((Karen.Brettell@thomsonreuters.com; +1 646 223 6274; Reuters Messaging: karen.brettell.reuters.com@reuters.net))