* Dollar little changed ahead of G20 meeting
* Euro on track for best month in 17 months
*
(Adds closing prices)
By OLGA COTAGA and Saikat Chatterjee
LONDON, June 28 (Reuters) - The dollar treaded water on
Friday ahead of a meeting between the United States and China at
the Group of 20 summit in Japan, shaking off light pressure from
U.S. economic data that did nothing to derail speculation about
a July interest rate cut.
The core U.S. personal consumption expenditure price index
rose 0.2% in May, as expected, reinforcing investor expectations
that the Federal Reserve will cut rates by at least 25 basis
points at the next meeting. As result, the dollar reaction to the data was limited and
the euro was trading late in the day at $1.1372 EUR= , 0.04%
firmer against the greenback on the day.
"In the big themes today, the data doesn't change the July
cut," said Kenneth Broux, head of corporate research at Societe
Generale.
The euro was on track for its biggest monthly gain since
February 2018 on the back of broad-based dollar weakness,
although it was off 0.9% for the first half of the year.
It remains unclear whether U.S. President Donald Trump and
Chinese President Xi Jinping will agree on a truce when they
meet at the G20, or escalate their trade conflict further,
leaving investors unsure about how to trade the dollar.
Still, markets are hoping that a meeting between the leaders
of the two largest economies will bring progress on trade,
despite fraught negotiations.
"I'm personally quite pessimistic on any deal being made,"
said Jordan Rochester, G10 forex strategist at Nomura.
However, any falls in the dollar are unlikely to become
sustained and so "the euro at $1.14 is a sell," Rochester said.
While inflation expectations in the United States and Europe
have declined in recent weeks, as measured by forward-starting
swaps, U.S. gauges have stabilised after the Fed opened the door
to rate cuts last week.
In comparison, policy interest rates in Europe are already
in negative territory and Europe's most widely watched measure
of inflation expectations - the five-year forward rate - has
started declining again.
"The elbow-room for the ECB to ease policy is far more
limited than the (U.S.) Fed and that is weighing on the euro,"
said Esther Reichelt, FX strategist at Commerzbank.
The dollar index .DXY , which measures the U.S. currency
against six of its peers, was at 96.15, little changed on the
week.
The dollar traded at 107.76 yen JPY= , little changed on
the day but on course for a 0.4% gain this week as the greenback
mounted a recovery from a five-month low of 106.77 yen reached
on Tuesday.
Currency bid prices at 3:01PM (1901 GMT)
Description RIC Last U.S. Pct Change YTD Pct High Bid Low Bid
Close Change
Previous
Session
Euro/Dollar EUR= $1.1372 $1.1368 +0.04% -0.85% +1.1393 +1.1352
Dollar/Yen JPY= 107.7600 107.7800 -0.02% -2.27% +107.900 +107.570
0 0
Euro/Yen EURJPY= 122.56 122.54 +0.02% -2.89% +122.780 +122.290
0 0
Dollar/Swiss CHF= 0.9753 0.9763 -0.10% -0.62% +0.9773 +0.9740
Sterling/Dollar GBP= 1.2698 1.2675 +0.18% -0.46% +1.2733 +1.2664
Dollar/Canadian CAD= 1.3083 1.3095 -0.09% -4.06% +1.3102 +1.3059
Australian/Dollar AUD= 0.7018 0.7008 +0.14% -0.44% +0.7019 +0.6999
Euro/Swiss EURCHF= 1.1093 1.1103 -0.09% -1.43% +1.1123 +1.1083
Euro/Sterling EURGBP= 0.8954 0.8970 -0.18% -0.33% +0.8992 +0.8941
NZ Dollar/Dollar NZD= 0.6713 0.6698 +0.22% -0.06% +0.6720 +0.6691
Dollar/Norway NOK= 8.5285 8.5124 +0.19% -1.28% +8.5434 +8.5050
Euro/Norway EURNOK= 9.7007 9.6798 +0.22% -2.07% +9.7192 +9.6742
Dollar/Sweden SEK= 9.2818 9.2757 +0.07% +3.55% +9.3040 +9.2552
Euro/Sweden EURSEK= 10.5560 10.5484 +0.07% +2.84% +10.5853 +10.5390
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Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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