- Euro finishes April modestly lower versus dollar
- Dollar index pulls back further from near two-year peak
- Yen hits three-week high vs dollar after China PMI data
- GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh
(Updates to include late U.S. market action)
The euro climbed to a one-week high against the dollar on Tuesday after first-quarter economic growth figures in the euro zone beat market expectations, dispelling some pessimism over the economic bloc's common currency.
Mixed U.S. data and caution ahead of a two-day Federal Reserve meeting pushed the dollar further away from a near two-year high.
Euro zone economic growth accelerated to 0.4% in the first three months of 2019, recovering from a slump in the second half of last year, data showed on Tuesday.
The stronger-than-forecast data offset a disappointing manufacturing PMI survey this month and cautious comments from European Central Bank policy-makers which raised concerns that the broader economy is struggling to gain traction.
"The (overall) data have been coming in better than expected. The euro is the biggest short in the market right now," said Steven Englander, global head of G10 FX research at Standard Chartered Bank in New York.
Higher-than-expected growth figures could squeeze some hedge funds who have been amassing large short positions in the euro, worth a net $14.8 billion in the week to April 23.
In late U.S. trading, the euro EUR=EBS was 0.3% higher at $1.1219 after the euro zone growth data. The currency ended up 0.01% in April, shaving its year-to-date loss against the greenback to 2.17%.
An index that tracks the dollar against the euro, yen, sterling and three other currencies .DXY was down 0.38% at 97.489, paring its monthly gain to 0.2%. It hit a 23-month high at 98.330 last Friday.
"We feel the dollar-buying move was a bit overdone," Englander said. Earlier Tuesday, data showed U.S. labor costs grew 0.7% in the first quarter, reinforcing the notion that wage pressure would stay tame even although hiring has remained strong, the Labor Department said.
Moreover, U.S. Midwest factory activity unexpectedly fell in April to its weakest since January 2017, according to an index from MNI and the Institute for Supply Management-Chicago.
Analysts expect no policy changes coming out of the Fed's two-day policy meeting, which ends on Wednesday, but investors want to hear how Fed Chairman Jerome Powell resolves the divergence between solid economic growth and slowing inflation.
Trading volume was muted by Japanese markets being closed for the Golden Week holiday. Activity will likely drop off further on Wednesday when China and much of Europe will be off for the May Day holiday.
The Japanese yen rallied to a three-week high after China's official Purchasing Managers' Index dipped to 50.1 April.
It JPY=EBS was up 0.26% at 111.355 yen per dollar, reducing its month-to-date loss to 0.483%.
======================================================== Currency bid prices at 3:03PM (1903 GMT)Description RIC Last U.S. Close Pct YTD Pct High Bid Low Bid Previous Change Change Session Euro/Dollar EUR= $1.1218 $1.1185 +0.30 -2.19 +1.1230 +1.1176 Dollar/Yen JPY= 111.3200 111.6300 -0.28 +0.96 +111.6900 +111.2400 Euro/Yen EURJPY= 124.95 124.94 +0.01 -1.01 +125.0800 +124.4800 Dollar/Swiss CHF= 1.0187 1.0195 -0.08 +3.80 +1.0204 +1.0175 Sterling/Dollar GBP= 1.3035 1.2936 +0.77 +2.18 +1.3048 +1.2927 Dollar/Canadian CAD= 1.3392 1.3456 -0.48 -1.80 +1.3480 +1.3381 Australian/Doll AUD= 0.7049 0.7055 -0.09 +0.01 +0.7069 +0.7032 arEuro/Swiss EURCHF= 1.1431 1.1403 +0.25 +1.57 +1.1445 +1.1389 Euro/Sterling EURGBP= 0.8603 0.8646 -0.50 -4.24 +0.8653 +0.8591 NZ NZD= 0.6676 0.6667 +0.13 -0.61 +0.6684 +0.6656 Dollar/DollarDollar/Norway NOK= 8.6250 8.6557 -0.35 -0.16 +8.6737 +8.6108 Euro/Norway EURNOK= 9.6766 9.6820 -0.06 -2.32 +9.6970 +9.6634 Dollar/Sweden SEK= 9.4878 9.5099 +0.09 +5.85 +9.5248 +9.4722 Euro/Sweden EURSEK= 10.6467 10.6370 +0.09 +3.71 +10.6565 +10.6220 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Net Euro short positions http//tmsnrt.rs/2GUfBy1GRAPHIC-World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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