* Aussie gives up 0.25% to touch more than 4-mth low
* Trump says trade deal with China still likely
* Italy may break EU budget rules, deputy prime minister
says
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, May 15 (Reuters) - The dollar was firmer in early
Asian trade on Wednesday while the Australian dollar brushed a
more than four-month low as traders eyed Chinese and European
data for clues on whether the worst is over for the global
economy.
The dollar was supported as trade issues remained
front-and-centre of investors' minds after U.S. and Chinese
officials had said the two countries would continue to negotiate
on trade.
U.S. President Donald Trump insisted on Tuesday that trade
talks with China had not collapsed and called the U.S.-China
trade war "a little squabble". "Investors will continue to monitor key barometer currency
pairs," said Nick Twidale, chief operating officer at Rakuten
Securities Australia in Sydney.
"The Aussie and (the Chinese) yuan remain under pressure
near recent lows," Twidale said in a note. "Traders will be
looking for more confirmation of a cooling in the trade war
before looking to enter into fresh long positions."
The dollar index against a basket of six key rivals was
steady at 97.542 .DXY , having risen 0.2% during the previous
session.
Market participants are now focused on data out of China and
Europe to provide the latest pointers on the state of the global
economy.
In the spotlight on Wednesday are Chinese industrial
production and retail sales for April, due at about 0200 GMT.
Later in the global day, focus turns to euro zone and German
gross domestic product reports and U.S. retail sales and
industrial product for April for further cues on global growth.
The euro was last a shade lower at $1.1203 EUR= .
The single currency ended the previous session lower after
Italy's deputy prime minister said the country is ready to break
European Union budget rules on debt levels if necessary to boost
employment. The Australian dollar gave up a quarter of a percent to
$0.6928 AUD=D4 , falling to its lowest since early January
ahead of the release of the Chinese data.
The Aussie is often seen as a proxy for Chinese growth
because of Australia's export-reliant economy and China being
the country's main destination for its commodities.
That sentiment was echoed by Bart Wakabayashi, Tokyo branch
manager at State Street Bank, who said investors continued to
view the Australian market as being reliant on China.
"If this trade situation continues to worsen, Aussie-yen is
probably a cross that we want to take a good look at," he said.
"It will be hard to hold on to long Aussie positions, with
the oil situation what it is."
In the commodity market, U.S. crude and Brent crude futures
were both down after the American Petroleum Institute reported a
bigger-than-expected build in crude oil inventory. Against the yen, the dollar edged down 0.05% to 109.56,
giving up some of the previous session's gains, when it rose
0.3%.
(Editing by Sam Holmes)