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Euro near 3-week highs on strong German data
THE euro held near three-week highs on Thursday as strong German industrial orders and hopes over a softening in US trade rhetoric towards European Union carmakers boosted sentiment.
German industrial orders had a stronger-than-expected jump in May after four consecutive monthly drops, as demand from domestic customers and the rest of the eurozone picked up.
Meanwhile, German carmakers are set to post their biggest daily gain since late March with Daimler, BMW , Volkswagen and Renault leading the broader index higher.
The US ambassador to Germany told German car bosses that President Donald Trump would suspend threats to impose tariffs on cars imported from the EU if the bloc lifted duties on US cars, a German newspaper reported on Wednesday.
"That looks like a breakthrough may be imminent and overall it is a broad euro-risk positive day," fund manager Constantin Bolz of German-based wealth manager Portfolio Concept said.
Reports that the European Central Bank may be preparing to raise interest rates by September or October also helped the euro, though thin volumes were a factor, with US markets shut overnight for Independence Day.
In early London trading, the single currency rallied to a high of US$1.1711, just shy of a three-week peak of US$1.1722.
By 1018 GMT, the euro was trading around US$1.16905, up 0.3 per cent on the day but still some distance from more than three year highs above US$1.2550 hit in early February.
But with a deadline for Washington to impose tariffs on Chinese imports also due, markets remained rangebound.
The dollar's index against six rivals was 0.34 per cent lower at 94.34, its lowest level in a week.
While the dollar has been supported by the perception of the relative strength of US economic growth and the attraction of its higher bond yields, some market players say recent falls in those yields may be undermining the currency.
The Fed will release minutes of its June meeting, with investors looking for clues on whether it is still on track to raise interest rates twice more this year. Monthly payrolls data follow on Friday.
Beyond the outlook on interest rates, markets will be closely analysing the recent strength in European activity data. REUTERS