TOKYO - The euro and yen steadied against the dollar on Thursday, after U.S. officials said President Donald Trump was expected to delay implementing tariffs on imported cars and parts by up to six months to give trade negotiators more time.
The euro was 0.1% higher at $1.1208, having bounced overnight from a one-week low of $1.1178. The single currency was initially hit as Italy's Deputy Prime Minister Matteo Salvini criticized European Union rules for the second day.
"Long term prospects for the euro are not particularly bright, given the region's soft economic fundamentals. But the news on the auto tariff delay is helping the euro establish support at the $1.1200 threshold," said Shin Kadota, senior strategist at Barclays in Tokyo.
The dollar edged down 0.1% to 109.485 yen.
Kyosuke Suzuki, director of FX at Societe Generale in Tokyo, said uncertainty stemming from the escalation in the Sino-U.S. trade war was weighing on the dollar.
The greenback had retreated to a low of 109.150 against the safe-haven yen on Wednesday as U.S. yields slid on weak U.S. April retail sales and industrial output data. China also reported surprisingly weaker growth in retail sales and industrial output for April, and the discouraging data from the world's two largest economies made investors more wary of riskier assets.
The dollar index against a basket of six major currencies was nearly flat at 97.542 after posting modest gains the previous day.
The Australian dollar was 0.25% lower at $0.6913.
The Aussie dropped to a low as $0.6893, its weakest since early January, after data on Thursday showed Australia's unemployment reach an eight-month high in April.
The lacklustre jobs data strengthened views that the Reserve Bank of Australia would be forced to cut interest rates soon.
Opinion polls show Australia's governing Liberal-National coalition is likely to be defeated by the opposition Labour Party in this weekend's general election, and the jobs data made unhelpful reading for ruling parties that campaigned hard on their record of providing sound economic management.
The pound struggled near a three-month low of $1.2827 brushed on Wednesday.
Sterling had taken a hit on expectations that British Prime Minister Theresa May will again fail to get her Brexit deal approved and could soon face a leadership challenge, adding to uncertainties.
(Editing by Simon Cameron-Moore) ((email@example.com; Reuters Messaging: firstname.lastname@example.org +813-6441-1774))