Euro rises on growth data, Italian assurances to stay…

Euro rises on growth data, Italian assurances to stay the course

50 and 20 Euro banknotes are displayed in this picture illustration taken November 14, 2017. REUTERS/Benoit Tessier/Illustration

NEW YORK (Reuters) - The euro rose on Friday as traders were encouraged by improved regional economic growth data and new assurances by Italian politicians that their nation would not leave the single currency.

The euro was on pace for a weekly gain of 0.29 percent against the dollar, reversing the prior week's 1.35 percent drop tied to the European Central Bank's hint it would hold interest rates through the summer of 2019.

FILE PHOTO: British Pound Sterling and U.S. Dollar notes are seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

The euro's advance, together with a rebound in commodity-linked and emerging market currencies, pressured the dollar, putting it in the red this week.

"The German and French data were better. There was more assurance from the Italian government about staying in the single currency," said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.

Business activity in Germany and France, the euro zone's top two economies, picked up in June despite trade tensions between Europe and the United States, IHS Markit data showed.

The current Italian government "does not want to exit the euro", Claudio Borghi, a top lawmaker in the far-right League party, said in a newspaper interview.

The single currency was also bolstered after Greece clinched debt relief and received a cash infusion from the euro zone.

At 10:22 a.m. (1422 GMT), the euro climbed 0.35 percent at $1.1642 <EUR=>, and increased 0.45 percent to 128.17 yen <EURJPY=>.

An index that tracks the dollar versus a basket of currencies including the euro <.DXY> was down 0.07 percent at 94.682, retreating further from an 11-month peak of 95.529 on Thursday.

The greenback also weakened against commodity-linked and emerging market currencies as worries about a global trade war were offset by a perceived modest increase in oil output by OPEC producers.

A bounce in crude prices <LCOc1>, which were up 3.5 percent, helped rekindle some investor confidence in higher-yielding currencies, analysts said.

OPEC agreed to a modest increase in oil production after its leader Saudi Arabia persuaded archrival Iran to cooperate.

The Australian dollar <AUD=D4> was up 0.7 percent at $0.74310 after hitting a 13-month low on Thursday, while the South African rand <ZAR=> rose 1 percent at 13.4370 per dollar, retreating further from a near seven-month trough earlier this week.

Still Europe's political situation, especially in Germany and Italy, and the global trade picture remained uncertain, which could put the dollar, euro and other currencies in a tight trading range into the quarter-end, analysts and traders said.

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Currency bid prices at 10:25AM (1425 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1642 $1.1601 +0.35% +0.00% +1.1675 +1.1600

Dollar/Yen JPY= 110.0600 109.9800 +0.07% +0.00% +110.2100 +109.8600

Euro/Yen EURJPY= 128.13 127.60 +0.42% +0.00% +128.5800 +127.5300

Dollar/Swiss CHF= 0.9905 0.9916 -0.11% +0.00% +0.9920 +0.9886

Sterling/Dollar GBP= 1.3264 1.3250 +0.11% +0.00% +1.3314 +1.3240

Dollar/Canadian CAD= 1.3329 1.3312 +0.13% +0.00% +1.3380 +1.3262

Australian/Doll AUD= 0.7428 0.7379 +0.66% +0.00% +0.7442 +0.7375