June 5, 2018 / 7:28 PM / 10 months ago

FOREX-Dollar reverses gains as euro rallies on Italy, ECB comments

    * Italy's Conte says no plan to leave euro zone
    * Mexican peso, Canadian dollar lead losers on trade war
    * Mexico says will slap tariffs on U.S. pork imports
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Recasts, adds comment, updates prices in text, table)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 5 (Reuters) - The dollar fell on Tuesday,
reversing gains to a near six-month high, as the euro rallied
after Italian Prime Minister Giuseppe Conte said the government
had never considered leaving the euro zone.
    "Conte's comments were reassuring to investors given the
make-up of the Italian coalition and its previous statements and
certainly helped pushed the euro higher," said Omer Esiner,
chief market analyst, at Commonwealth Foreign Exchange in
    Conte told parliament on Tuesday that his new government had
no plans to leave the euro zone.
    Italy's ruling coalition's original choice as economy
minister, euro-skeptic economist Paolo Savona, was turned down
by the head of state because of his views on the euro. He was
replaced by a more reassuring figure for financial markets.
    The euro also benefited as Bloomberg, citing sources,
reported that the European Central Bank could conclude its next
policy meeting this month with a public announcement on when its
quantitative easing program would end, analysts said.
    Markets have not been expecting an announcement on QE this
month given the uncertainty caused by the Italian political
    "The most recent data out of the euro zone has dampened
expectations for near-term change in monetary policy by the
ECB," Esiner said.
    "The (Bloomberg) report suggests that the ECB may be looking
past the softness in economic data out of the euro zone, and the
political headwinds in Italy to focus on a gradual normalization
of monetary policy," he added.
    The euro rose 0.1 percent against the dollar to $1.1712
, which pushed the dollar index, also 0.1 percent lower to
    Earlier in the session, the dollar had rallied as the latest
development in a growing trade conflict between the United
States and its commercial partners prompted selling in emerging
market currencies.
    Mexico said it would impose a 20 percent tariff on U.S. pork
imports after U.S. President Donald Trump slapped tariffs on
steel and aluminium.
    The tariff was in response to the Trump administration's
decision last week to impose steel and aluminum tariffs on
Mexican exporters on grounds that countries including Mexico
engage in competition damaging to U.S. national security.
    The Mexican peso and Canadian dollar posted
the biggest losses against the U.S. dollar as trade war concerns
 rose. Other emerging market currencies such as the South
African rand also fell in tandem with the peso. 
    The peso fell to a more than one-year low against the
dollar, which was last up 1.5 percent at 20.3762 pesos. Against
the Canadian dollar, the U.S. currency rose 0.4 percent to
    Currency bid prices at 3:07PM (1907 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1711        $1.1698     +0.11%         -2.38%      +1.1732     +1.1654
 Dollar/Yen       JPY=        109.7500       109.8000    -0.05%         -2.59%      +110.0000   +109.4900
 Euro/Yen         EURJPY=     128.53         128.45      +0.06%         -4.92%      +128.7000   +127.8000
 Dollar/Swiss     CHF=        0.9846         0.9876      -0.30%         +1.06%      +0.9894     +0.9831
 Sterling/Dollar  GBP=        1.3388         1.3311      +0.58%         -0.92%      +1.3409     +1.3303
 Dollar/Canadian  CAD=        1.2974         1.2927      +0.36%         +3.16%      +1.3067     +1.2914
 Australian/Doll  AUD=        0.7613         0.7643      -0.39%         -2.42%      +0.7656     +0.7595
 Euro/Swiss       EURCHF=     1.1532         1.1556      -0.21%         -1.34%      +1.1563     +1.1507
 Euro/Sterling    EURGBP=     0.8746         0.8787      -0.47%         -1.54%      +0.8791     +0.8724
 NZ               NZD=        0.7024         0.7027      -0.04%         -0.88%      +0.7044     +0.6999
 Dollar/Norway    NOK=        8.1129         8.1162      -0.04%         -1.15%      +8.1526     +8.0927
 Euro/Norway      EURNOK=     9.5019         9.4972      +0.05%         -3.52%      +9.5195     +9.4731
 Dollar/Sweden    SEK=        8.7525         8.7560      +0.07%         +6.72%      +8.7953     +8.7330
 Euro/Sweden      EURSEK=     10.2532        10.2460     +0.07%         +4.21%      +10.2610    +10.2138
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Cynthia
Osterman and Richard Chang)
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