* Greenback weakens after strong Chinese data
* Aussie dollar outperforms
* Kiwi drops after inflation slows (New throughout, updates trading and comments to U.S. marketopen, new byline, changes dateline, previous LONDON)
NEW YORK, April 17 (Reuters) - The greenback weakened onWednesday as better-than-expected economic data in Chinabolstered risk appetite and boosted the Australian dollar.
China's economy grew at a steady 6.4 percent pace in thefirst quarter, defying expectations for a further slowdown, asindustrial production surged and consumer demand showed signs ofimprovement.
"Risk sentiment seems to have improved overnight on the backof the strong Chinese data," said Shaun Osborne, chief FXstrategist at Scotiabank in Toronto.
Investors are closely watching Chinese and European economicdata for signals that global growth is recovering.
The release of Purchasing Managers Indexes (PMIs) for themanufacturing and service sectors in Europe on Thursday willprovide the next indication of the strength of the Europeaneconomy.
Investment inflows into Europe have been improving, whichmay give the euro a boost against the greenback. The U.S. dollaris also heading into a period of the year when it hastraditionally weakened.
"We're at the upper end of the range for the dollar and wethink seasonal pressures should start to weigh a little bit moreon the dollar going forward, generally this is about the time ofyear when the dollar starts to soften up from a seasonal pointof view," said Osborne.
The Australian dollar outperformed on the Chinese data. Thecurrency is sensitive to the economic fortunes of China,Australia's biggest trading partner.
"It is becoming very clear again this morning what reallymatters for the Australian dollar is China. The currency is updespite the fact that the RBA rate meeting caused negativesentiment yesterday," said Esther Maria Reichelt, an FXstrategist at Commerzbank in Frankfurt.
The New Zealand dollar, meanwhile, fell after data showedthat annual inflation slowed in the first quarter, which raisedthe odds of an interest rate cut in the coming months.
Data on Wednesday also showed that the U.S. trade deficitfell to an eight-month low in February as exports to Chinasurged, helping to eclipse a rebound in overall imports, whichcould boost economic growth estimates for the first quarter.
Currency bid prices at 9:30AM (1330 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Session Euro/Dollar EUR= $1.1299$1.1280 +0.17% -1.48% +1.1324 +1.1280 Dollar/Yen JPY= 111.9800 111.9900 -0.01% +1.56% +112.1600 +111.9300 Euro/Yen EURJPY= 126.50 126.34 +0.13% +0.22% +126.8100 +126.2900 Dollar/Swiss CHF= 1.0089 1.0078 +0.11% +2.80% +1.0092 +1.0068 Sterling/Dollar GBP= 1.3046 1.3048 -0.02% +2.27% +1.3068 +1.3030 Dollar/Canadian CAD= 1.3292 1.3349 -0.43% -2.53% +1.3371 +1.3274 Australian/Doll AUD= 0.7198 0.7175 +0.32% +2.11% +0.7205 +0.7154 ar Euro/Swiss EURCHF= 1.1401 1.1368 +0.29% +1.31% +1.1412 +1.1366 Euro/Sterling EURGBP= 0.8661 0.8643 +0.21% -3.60% +0.8680 +0.8642 NZ NZD= 0.6735 0.6761 -0.38% +0.27% +0.6775 +0.6672 Dollar/Dollar Dollar/Norway NOK= 8.4686 8.4911 -0.26% -1.97% +8.4993 +8.4600 Euro/Norway EURNOK= 9.5712 9.5847 -0.14% -3.38% +9.5963 +9.5711 Dollar/Sweden SEK= 9.2324 9.2571 -0.11% +3.00% +9.2660 +9.2167 Euro/Sweden EURSEK= 10.4330 10.4445 -0.11% +1.65% +10.4603 +10.4320
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