March 5, 2019 / 4:53 PM / 15 days ago

FOREX-Dollar hits two-week high on upbeat U.S. data, euro slips

    * U.S. services sector, new home sales beat expectations
    * Euro loses traction ahead of ECB meeting, underpins dollar
    * Canadian dollar at five-week low on trade, political woes
    * Aussie dollar rises briefly on sunny RBA outlook
    * GRAPHIC-World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action; changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 5 (Reuters) - The dollar climbed to a two-week high against a basket
of currencies on Tuesday as stronger-than-forecast data on U.S. services industries and
new home sales allayed some worries about the state of the world's largest economy.
    The euro weakened to a two-week lows versus the greenback on expectations
the European Central Bank meeting on Thursday would hint at a delay in raising rates
until next year and soon relaunch long-term bank loans to battle an economic slowdown.
    Among other G10 currencies, the Canadian dollar fell to its lowest in over
five weeks due to a combination of trade troubles, resignations from Prime Minister
Justin Trudeau's cabinet and expectations the Bank of Canada could be on the cusp of
changing its policy direction. 
    "The dollar has been supported by the data," said Brendan McKenna, currency
strategist at Wells Fargo Securities in New York.
    Earlier on Tuesday, the U.S. Commerce Department said new single-family home sales
increased to a seven-month peak in December, while the Institute for Supply Management
said its gauge on services sector activity rose more than expected last month.

    An index that tracks the dollar against the euro, yen, sterling and three
other major currencies edged 0.22 percent higher to 96.895 at 11:48 a.m. EST (1648 GMT).
It earlier touched a two-week high of 97.008.
    The euro fell to a two-week trough of $1.1292. It was last down 0.35 percent to
$1.13.
    "The ECB's new projections on Thursday might paint a more subdued picture than
before," said Commerzbank FX analyst Antje Praefcke, adding the euro appeared to be
"aiming for the $1.13 mark."   
    Investors are seeking out higher-yielding currencies as price volatility in the
world's most-traded currencies has plummeted following a dovish shift by major central
banks.
    The Bank of Canada is expected to leave domestic borrowing costs unchanged at its
policy meeting on Wednesday. Some traders expect it might lower rates later this year.

    The Canadian currency was 0.32 percent weaker at C$1.3347. It hit C$1.336
earlier on Tuesday, which was its lowest against the greenback since Jan. 25.
    Meanwhile, the Australian dollar rose briefly after the Reserve bank of
Australia left key rates unchanged earlier Tuesday and policy-makers clung to an
optimistic outlook on the economy.
    The Aussie dollar retreated in U.S. trading from its earlier session peaks, down 0.25
percent on the day at $0.7074.
========================================================
    Currency bid prices at 1147 EST (1647 GMT):
 Description      RIC        Last      U.S. Close  Pct      YTD Pct  High Bid   Low Bid
                                       Previous    Change   Change              
                                       Session                                  
 Euro/Dollar                 $1.1298   $1.1337     -0.34    -1.49    +1.1351    +1.1292
 Dollar/Yen                  111.9600  111.7400    +0.20    +1.54    +112.1200  +111.7300
 Euro/Yen                    126.52    126.70      -0.14    +0.23    +126.9400  +126.4500
 Dollar/Swiss                1.0043    0.9988      +0.55    +2.33    +1.0048    +0.9985
 Sterling/Dollar             1.3139    1.3186      -0.36    +2.99    +1.3197    +1.3099
 Dollar/Canadian             1.3348    1.3302      +0.35    -2.12    +1.3361    +1.3301
 Australian/Doll             0.7073    0.7092      -0.27    +0.34    +0.7096    +0.7059
 ar                                                                             
 Euro/Swiss                  1.1350    1.1327      +0.20    +0.85    +1.1354    +1.1322
 Euro/Sterling               0.8596    0.8603      -0.08    -4.31    +0.8646    +0.8585
 NZ                          0.6784    0.6818      -0.50    +1.00    +0.6827    +0.6770
 Dollar/Dollar                                                                  
 Dollar/Norway               8.6681    8.6429      +0.29    +0.34    +8.6845    +8.6439
 Euro/Norway                 9.7952    9.8028      -0.08    -1.11    +9.8240    +9.7952
 Dollar/Sweden               9.3211    9.3375      -0.53    +4.00    +9.3798    +9.3059
 Euro/Sweden                 10.5320   10.5884     -0.53    +2.61    +10.6300   +10.5338
    
 

    
 (Additional reporting by Tom Finn in London, Sujata Rao and Shinichi Saoshiro in Tokyo;
editing by Kevin Liffey, Ed Osmond and G Crosse)
  
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