FOREX-Dollar weakens vs euro after China growth data tops views

* Data on Thursday will provide clues on European economy

* Kiwi drops after inflation slows (Updates prices)

By Karen Brettell

China's economy grew at a steady 6.4 percent pace in the first quarter, defyingexpectations for a further slowdown, as industrial production surged and consumer demandshowed signs of improvement.

"Risk sentiment seems to have improved overnight on the back of the strong Chinesedata," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

Investors are closely watching Chinese and European economic data for signals thatglobal growth is recovering.

The release of Purchasing Managers Indexes (PMIs) for the manufacturing and servicesectors in Europe on Thursday will provide the next indication of the strength of theEuropean economy.

Investment inflows into Europe have been improving, which may give the euro a boostagainst the greenback.

"We're at the upper end of the range for the dollar and we think seasonal pressuresshould start to weigh a little bit more on the dollar going forward. Generally this isabout the time of year when the dollar starts to soften up from a seasonal point ofview," Osborne said.

The Australian dollar jumped on the Chinese data before giving back the gains. Thecurrency is sensitive to the economic fortunes of China, Australia's biggest tradingpartner.

The Aussie weakened on Tuesday after the Reserve Bank of Australia said that a cut ininterest rates would be "appropriate" should inflation stay low and unemployment trendhigher.

The New Zealand dollar fell after data showed that annual inflation slowed in thefirst quarter, which raised the odds of an interest rate cut in the coming months.

Other data on Wednesday showed that the U.S. trade deficit fell to an eight-month lowin February as imports from China plunged, temporarily providing a boost to PresidentDonald Trump's "America First" agenda and economic growth in the first quarter.


Currency bid prices at 1417 EDT (1817 GMT): Description RIC Last U.S. Close Pct YTD Pct High Bid Low Bid

Previous Change Change

Session Euro/Dollar EUR= $1.1295$1.1280 +0.13 -1.52 +1.1324 +1.1280 Dollar/Yen JPY= 112.0400 111.9900 +0.04 +1.61 +112.160 +111.9300

0 Euro/Yen EURJPY= 126.53 126.34 +0.15 +0.25 +126.810 +126.2900

0 Dollar/Swiss CHF= 1.0108 1.0078 +0.30 +3.00 +1.0109 +1.0068 Sterling/Dollar GBP= 1.3031 1.3048 -0.13 +2.15 +1.3068 +1.3030 Dollar/Canadian CAD= 1.3343 1.3349 -0.04 -2.16 +1.3371 +1.3274 Australian/Doll AUD= 0.7167 0.7175 -0.11 +1.67 +0.7205 +0.7154 ar Euro/Swiss EURCHF= 1.1418 1.1368 +0.44 +1.44 +1.1421 +1.1366 Euro/Sterling EURGBP= 0.8666 0.8643 +0.27 -3.54 +0.8680 +0.8642 NZ NZD= 0.6716 0.6761 -0.67 +0.00 +0.6775 +0.6672 Dollar/Dollar Dollar/Norway NOK= 8.4935 8.4911 +0.03 -1.68 +8.5022 +8.4600 Euro/Norway EURNOK= 9.5950 9.5847 +0.11 -3.15 +9.6045 +9.5711 Dollar/Sweden SEK= 9.2475 9.2571 +0.02 +3.17 +9.2660 +9.2167 Euro/Sweden EURSEK= 10.4470 10.4445 +0.02 +1.78 +10.4603 +10.4320

(Reporting by Karen BrettellAdditional reporting by Tom Finn in London; Editing by Bernadette Baum and Leslie Adler) ((Karen.Brettell@thomsonreuters.com; +1 646 223 6274; Reuters Messaging:karen.brettell.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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