* U.S. threatens to slap more tariffs on EU goods
* JP Morgan gauge of manufacturing falls to lowest in 7
years
* RBA cuts rates, turns neutral; Aussie dollar up
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates prices, adds new comment, FX table, changes byline,
dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 2 (Reuters) - The dollar slipped from
two-week highs on Tuesday, as optimism about easing trade
tensions between the United States and China faded, even as U.S.
President Donald Trump turned his attention to the European
Union with threats of additional tariffs.
The Australian dollar, meanwhile, led all gainers on Tuesday
after the Reserve Bank of Australia cut interest rates, as
expected, but signalled a more balanced outlook.
Washington threatened to slap tariffs on $4 billion of
additional EU goods, ramping up the pressure on Europe in a
long-running dispute over aircraft subsidies. "Dollar gains stemming from trade developments are likely to
come in fits and starts given that the outlook for a meaningful
agreement remains elusive," said Joe Manimbo, senior market
analyst at Western Union Business Solutions in Washington.
Risky assets overall struggled to gain momentum after
Monday's relief rally, with weak manufacturing surveys pointing
to global economic headwinds.
JPMorgan's gauge of global manufacturing fell to its weakest
in almost seven years, showing contraction for the second month
in a row, while Morgan Stanley's surveys showed world
manufacturing shrinking for the first time since 2016.
Against a basket of its rivals .DXY , the dollar was 0.1%
lower at 96.70 and not far from a three-month low of 95.84 hit
last week, as traders priced in aggressive interest rate cuts by
the Federal Reserve of at least three times by the end of the
year.
The global investor spotlight will move to data on U.S.
non-farm payrolls on Friday, which economists expect to have
risen by 160,000 in June, compared with a 75,000 increase in
May.
EURO BOUNCES
The euro got a brief boost after a media report said the
European Central Bank was in no rush to cut interest rates at a
July policy meeting.
The single currency EUR= was last slightly up at $1.1289.
Though central bank officials are divided on the timing of
the next policy move, market gauges of interest rates have
increased the odds of an ECB cut later this month, thanks to a
global drop in bond yields.
With volatility subdued - for example, an index .DBCVIX
measuring broad currency moves is near a record low - and
central banks in easing mode, markets are ultra sensitive to any
slight tweak in policy settings.
The Australian dollar was the sole spot of strength in the
currency market, rising 0.4% to US$0.6995 AUD= after the RBA
lowered interest rates by 25 basis points to a record low of
1.00%, matching economists' expectations.
It said it would lower rates again "if needed," a phrase
some analysts took to mean that an additional rate cut was less
likely than previously thought.
========================================================
Currency bid prices at 10:11AM (1411 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1291 $1.1285 +0.05% -1.55% +1.1319 +1.1276
Dollar/Yen JPY= 108.2400 108.4300 -0.18% -1.83% +108.4700 +108.1200
Euro/Yen EURJPY= 122.22 122.37 -0.12% -3.17% +122.5200 +122.1600
Dollar/Swiss CHF= 0.9881 0.9874 +0.07% +0.68% +0.9888 +0.9865
Sterling/Dollar GBP= 1.2606 1.2638 -0.25% -1.18% +1.2652 +1.2606
Dollar/Canadian CAD= 1.3120 1.3134 -0.11% -3.79% +1.3138 +1.3108
Australian/Doll AUD= 0.6990 0.6965 +0.36% -0.84% +0.7000 +0.6958
ar
Euro/Swiss EURCHF= 1.1158 1.1144 +0.13% -0.85% +1.1172 +1.1131
Euro/Sterling EURGBP= 0.8953 0.8926 +0.30% -0.35% +0.8966 +0.8921
NZ NZD= 0.6665 0.6669 -0.06% -0.77% +0.6680 +0.6657
Dollar/Dollar
Dollar/Norway NOK= 8.5698 8.5799 -0.12% -0.80% +8.5894 +8.5453
Euro/Norway EURNOK= 9.6766 9.6825 -0.06% -2.32% +9.6918 +9.6660
Dollar/Sweden SEK= 9.3339 9.3598 -0.23% +4.13% +9.3642 +9.3247
Euro/Sweden EURSEK= 10.5387 10.5625 -0.23% +2.68% +10.5745 +10.5348
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