FOREX-Dollar firm on upbeat U.S. data; pound and euro hit the skids

* Strong US data curbs expectations of deep Fed rate cut
* Pound hovers near 27-month lows on Brexit woes
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Shinichi Saoshiro
TOKYO, July 17 (Reuters) - The dollar was firm on Wednesday
after upbeat U.S. data tempered expectations of aggressive
policy easing by the Federal Reserve later this month, while the
struggling pound and euro also provided additional impetus to
the greenback.
The dollar index .DXY against a basket of six major
currencies was effectively unchanged at 97.363 after gaining
0.5% the previous day.
The dollar rose after stronger-than-expected June U.S.
retails sales data reduced the chance of the Fed cutting
interest rates by 50 basis points rather than 25 basis points at
its month-end policy review.
"The strong U.S. data is a key driver behind the dollar's
latest gains, but weakness in European currencies, notably the
pound and euro, is also playing a significant role as well,"
said Junichi Ishikawa, senior FX strategist at IG Securities.
The pound GBP=D4 retreated to a 27-month low of $1.2396
overnight as Boris Johnson and Jeremy Hunt, the two candidates
to be Britain's next prime minister, vied to outgun each other
on taking a harder Brexit stance. GBP/
Sterling last traded little changed at $1.2411.
The euro EUR= was steady at $1.1212 after losing more than
0.4% the previous day. The losses came after a survey by the ZEW
institute showed that the mood among German investors
deteriorated more sharply than expected in July amid an
unresolved trade dispute between China and the United States as
well as political tensions with Iran. The dollar was almost flat at 108.215 yen JPY= after
advancing 0.3% against the yen overnight on the strong U.S.
retail sales data.
The Australian dollar AUD=D4 edged up 0.05% to $0.7016,
having lost 0.4% on Tuesday following comments by U.S. President
Donald Trump.
The United States still has a long way to go to conclude a
trade deal with China but could impose tariffs on an additional
$325 billion worth of Chinese goods if it needed to do so, Trump
said. The Aussie is sensitive to the economic fortunes of China,
Australia's largest trading partner.
The impact of Trump's comments on other major currencies,
however, was limited.
"The U.S.-China trade row is not at the centre of the
market's attention right now. Focus is on the Fed's policy, U.S.
data and their impact on yields," Ishikawa at IG Securities
said.