* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, Feb 6 (Reuters) - The euro struggled to stay above a
two-month low on Thursday after data showed German industrial
orders unexpectedly plunged in December, suggesting the euro
zone economy would remain sluggish in the opening months of
2020.
Contracts German goods fell 2.1% in December from November,
the biggest drop since February. A Reuters poll had forecast a
0.6% rise. Weak data and some large option structures kept investor
sentiment subdued. The euro found some support just below $1.10.
The euro and the British pound remained under pressure as
tensions rose between the European Union and Britain over a
post-Brexit trade deal.
The EU's markets watchdog asked its British counterpart on
Thursday to ensure that ICE Futures Europe and the London Metal
Exchange fully comply with EU market transparency rules for
commodity derivatives. On Wednesday, the pound fell after a media report indicated
that the EU would look to re-write a major set of European
financial regulations known as Mifid II. GBP/
"The UK and EU have not begun the formal negotiation process
of trade talks, but both sides appear to be doing their best to
antagonize the other," said Marc Chandler, chief market
strategist at Bannockburn Global Forex LLC.
Against the dollar, the euro EUR=EBS was steady at
$1.09975, not far from the $1.09920 reached last week.
Options amounting to nearly $1 billion are expiring around
$1.10 levels later in the day, which is also keeping the cash
markets in a tight range, traders said.
AUSSIE UP
The Australian dollar rose for a fourth straight day and the
Chinese yuan gained after Beijing unexpectedly said it would
reduce tariffs on some U.S. imports.
China said on Thursday it would halve tariffs on some U.S.
imports, bolstering hopes the global economy will avoid a major
shock from China's coronavirus outbreak. It also said it hoped
to work with the United States to eliminate all tariff increases
in future. That seemed to dispel pessimism about the economic impact of
the coronavirus. Still, the number of deaths from the disease
rose by 75 on Thursday, almost all of them in China, and media
reports this week of a treatment proved to be premature.
Moreover, though infections stood at more than 28,000, RBC's
Lignos noted Thursday was the first day in over a week that new
case numbers appear to be stabilising in China.
Against the dollar, the Aussie AUD=D3 advanced 0.1% to
$0.6765. The Chinese yuan was trading at 6.9702 yuan per dollar,
after weakening to 7 per dollar on Monday.
Broader market volatility fell to new lows, with one-month
implied euro-dollar price swings EUR1MO= dropping to a record
low of 3.7% this week.
EURUSD and CESI https://tmsnrt.rs/2tyTER0
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