Dollar firm, Aussie pressured before Chinese, European data

Wednesday,   15-May-2019   09:03 AM (IST)

The dollar was firmer in early Asian trade on Wednesday while the Australian dollar brushed a more than four-month low as traders eyed Chinese and European data for clues on whether the worst is over for the global economy. The dollar was supported as trade issues remained front-and-center of investors' minds after U.S. and Chinese officials had 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 U.S.-China trade war "a little squabble". The dollar index against a basket of six key rivals was steady at 97.542, having risen 0.2% during the previous session. Market participants are now focused on data out of China and Europe to provide the latest pointers on the state of the global economy. In the spotlight on Wednesday are Chinese industrial production and retail sales for April, due at about 0200 GMT. Later in the global day, focus turns to euro zone and German gross domestic product reports and U.S. retail sales and industrial product for April for further cues on global growth. The euro was last a shade lower at $1.1203. The single currency ended the previous session lower after Italy's deputy prime minister said the country is ready to break European Union budget rules on debt levels if necessary to boost employment. The Australian dollar gave up a quarter of a percent to $0.6928, falling to its lowest since early January ahead of the release of the Chinese data. The Aussie is often seen as a proxy for Chinese growth because of Australia's export-reliant economy and China being the country's main destination for its commodities. That sentiment was echoed by Bart Wakabayashi, Tokyo branch manager at State Street Bank, who said investors continued to view the Australian market as being reliant on China. In the commodity market, U.S. crude and Brent crude futures were both down after the American Petroleum Institute reported a bigger-than-expected build in crude oil inventory. Against the yen, the dollar edged down 0.05% to 109.56, giving up some of the previous session's gains, when it rose 0.3%.