Stocks

FOREX-German data fails to sink euro as U.S. tariffs eyed

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee

LONDON, Feb 14 (Reuters) - The euro rose from a three-monthlow on Thursday as hopes of progress in China-U.S. trade talkslifted risk appetite towards major currencies across the board,with the British pound the only laggard before a parliamentarydebate on Brexit.

Even economic data showing Germany's economy stalled in thefourth quarter of 2018 with Italy already in recession failed topull the euro significantly lower in quiet trading.

"If we had a negative print on German growth that may havehit the euro but we need to await for more details on hisstrategy towards the European auto sector before pushing theeuro higher," said Jeremy Stretch, head of G10 FX strategy atCIBC Capital Markets in London.

Market analysts fear that U.S. President Donald Trump couldturn his attention to European imports after China andpotentially impose tariffs on European automakers in the comingdays.

The United States is the main export destination of EuropeanUnion cars, well ahead of China, and the impact is significantespecially for Germany, which has the biggest value added inexports of cars to the U.S.

Massive option expiries amounting to $1.2 billion around$1.13 were expected to keep the euro spot market in a tightrange.

Risk appetite grew after China reported dollar-denominatedexports rose 9.1 percent in January from a year earlier andimports dropped 1.5 percent.

The strong trade data fuelled gains by the Chinese currencyin the offshore market. The yuan CNH= gained a quarter of apercent to 6.7635.

The Australian dollar AUD=D3 , a barometer for global riskappetite, was up 0.6 percent at $0.7132 and on track for itsbest three-day rising streak so far this year.

Bloomberg reported President Donald Trump was consideringpushing back by 60 days a March 1 deadline for resolving tradedisputes with China, citing people familiar with the matter. OnWednesday, Trump had said the talks were "going along verywell".

Elsewhere, German data showed its economy stalled in thefinal quarter of 2018, narrowly avoiding recession. But thenumbers were in line with forecasts and weak eurozone GDP datafor the quarter had already tempered expectations.

Broadly, the euro zone economy slowed as expectedyear-on-year in the last three months of 2018.

The euro EUR=EBS rose 0.1 percent to $1.1271 and justabove a three-month low of $1.1248.

The pound GBP=D3 fell more than a quarter of a percent tothe day's low at $1.2806 before a parliamentary vote that couldgive investors a sense of which way a forthcoming vote on PrimeMinister Theresa May's deal with Brussels will go. GBP/

saikat.chatterjee@thomsonreuters.com saikat.chatterjee.reuters.com@reuters.net


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