FOREX-Dollar advances as risk appetite rises; markets shrug off U.S. data

Single dollar bills mashed up with U.S. flag

* U.S. manufacturing index lowest since Nov 2016

* Other U.S. data weaker as well

* Dollar hits 10-week high vs yen

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Recasts, adds comment, FX table, updates prices, changesbyline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, March 1 (Reuters) - The dollar rose on Friday,hitting 10-week-highs against the yen, as risk appetite improvedamid a more upbeat outlook on the euro and the prospect of atrade deal between China and the United States.

"Risk-on sentiment amid a global stock rally worked in favorof the euro and commodity rivals like the loonie, Aussie andkiwi dollars, while rising Treasury yields have pulled thegreenback out of its biggest hole in weeks," said Joe Manimbo,senior market analyst at Western Union Business Solutions inWashington.

Friday's slew of weaker-than expected U.S. economic dataweighed on the dollar initially, especially the manufacturingindex, but the greenback rallied to trade higher on the day.

In late morning trading, the dollar index rose 0.2 percentto 96.307 .DXY .

The dollar was earlier supported by data on Thursday showingU.S. gross domestic product had grown at an annual 2.6 percentrate in the fourth quarter, exceeding forecasts for a 2.3percent gain.

The dollar was up 0.5 percent at 111.93 yenJPY= afterhitting a 10-week high.

Sterling was down at 0.3 percent at $1.3219GBP= .

The euro, meanwhile, was little changed against the dollarat $1.1377EUR= . It traded flat in London after data showedunderlying inflation in the euro zone remained subdued.

The euro zone single currency rose earlier after news that aU.S. manufacturing index had fallen in February to its lowestsince November 2016 suggested economic momentum has slowed thisyear.

The Institute for Supply Management's U.S. manufacturingindex fell to 54.2 in February from 56.6 the previous month. Theprices paid index, a measure of inflation, also fell, to 49.4,the weakest since February 2016.

Other economic data were also soft, with aweaker-than-expected University of Michigan consumer sentimentindex for February as well as a drop in both U.S. personalincome and spending. These reports underscore expectations forweaker growth momentum in the first quarter.

"All of these things are putting a damper on the dollar. Themarket was looking for a stronger recovery after the shutdown,"said Joe Trevisani, senior analyst, at FXstreet.com in New York.

"They're saying that the shutdown is transitory and wouldn'thave that much of an impact. But looking at these numbers,that's not the story they're telling. It's not a big collapse,but it's not as strong as people thought," he added, referringto the 35-day partial U.S. government shutdown that ended Jan.25.

Earlier data showing a drop in both U.S. personal income andspending had little impact on the dollar. A key inflation gaugein that report showed the headline rate falling to 1.7 percentfrom 1.8 percent, with core inflation at 1.9 percent inDecember, just below the Fed's 2 percent target.

Currency bid prices at 11:24AM (1624 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session Euro/Dollar EUR= $1.1378$1.1370 +0.07% -0.79% +1.1408 +1.1353 Dollar/Yen JPY= 111.8600 111.3700 +0.44% +1.45% +111.9700 +111.3300 Euro/Yen EURJPY= 127.30 126.64 +0.52% +0.86% +127.5000 +126.6300 Dollar/Swiss CHF= 0.9985 0.9981 +0.04% +1.74% +1.0008 +0.9964 Sterling/Dollar GBP= 1.3220 1.3261 -0.31% +3.63% +1.3286 +1.3213 Dollar/Canadian CAD= 1.3259 1.3166 +0.71% -2.77% +1.3267 +1.3130 Australian/Doll AUD= 0.7087 0.7094 -0.10% +0.54% +0.7121 +0.7084 ar Euro/Swiss EURCHF= 1.1363 1.1348 +0.13% +0.97% +1.1371 +1.1342 Euro/Sterling EURGBP= 0.8605 0.8574 +0.36% -4.22% +0.8611 +0.8571 NZ NZD= 0.6811 0.6806 +0.07% +1.40% +0.6838 +0.6807 Dollar/Dollar Dollar/Norway NOK= 8.5697 8.5606 +0.11% -0.80% +8.5755 +8.5365 Euro/Norway EURNOK= 9.7527 9.7361 +0.17% -1.55% +9.7562 +9.7193 Dollar/Sweden SEK= 9.2502 9.2348 +0.21% +3.20% +9.2565 +9.2165 Euro/Sweden EURSEK= 10.5260 10.5040 +0.21% +2.55% +10.5308 +10.4840

gertrude.chavez@thomsonreuters.com gertrude.chavez.reuters.com@reuters.net

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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