[TOKYO] The US dollar was firmer in early Asian trade on Wednesday while the Australian dollar brushed a more than four-month low as traders eyed Chinese and European data for clues on whether the worst is over for the global economy.

The US dollar was supported as trade issues remained front-and-centre of investors' minds after US and Chinese officials had said the two countries would continue to negotiate on trade.

US President Donald Trump insisted on Tuesday that trade talks with China had not collapsed and called the US-China trade war "a little squabble".

"Investors will continue to monitor key barometer currency pairs," said Nick Twidale, chief operating officer at Rakuten Securities Australia in Sydney.

"The Aussie and (the Chinese) yuan remain under pressure near recent lows," Mr Twidale said in a note. "Traders will be looking for more confirmation of a cooling in the trade war before looking to enter into fresh long positions."

The US dollar index against a basket of six key rivals was steady at 97.542, having risen 0.2 per cent during the previous session.

Market participants are now focused on data out of China and Europe to provide the latest pointers on the state of the global economy.

In the spotlight on Wednesday are Chinese industrial production and retail sales for April, due at about 0200 GMT.

Later in the global day, focus turns to euro zone and German gross domestic product reports and US retail sales and industrial product for April for further cues on global growth.

The euro was last a shade lower at US$1.1203.

The single currency ended the previous session lower after Italy's deputy prime minister said the country is ready to break European Union budget rules on debt levels if necessary to boost employment.

The Australian dollar gave up a quarter of a per cent to US$0.6928, falling to its lowest since early January ahead of the release of the Chinese data.

The Aussie is often seen as a proxy for Chinese growth because of Australia's export-reliant economy and China being the country's main destination for its commodities.

That sentiment was echoed by Bart Wakabayashi, Tokyo branch manager at State Street Bank, who said investors continued to view the Australian market as being reliant on China.

"If this trade situation continues to worsen, Aussie-yen is probably a cross that we want to take a good look at," he said.

"It will be hard to hold on to long Aussie positions, with the oil situation what it is."

In the commodity market, US crude and Brent crude futures were both down after the American Petroleum Institute reported a bigger-than-expected build in crude oil inventory.

Against the yen, the US dollar edged down 0.05 per cent to 109.56, giving up some of the previous session's gains, when it rose 0.3 per cent.

REUTERS