LONDON: The euro held near a two-week high on Friday as investors waited for signs of how the euro zone economy is faring, while the Australian dollar rebounded after China denied it had banned imports of the country's coal.
Weak data since January has undermined support for the euro and prompted investors to lower their inflation expectations. But hopes for an easing of the U.S.-China trade conflict pushed it up 0.2 percent on Friday, to $1.1351.
Analysts assessing the euro's prospects are focused on whether a recent slowdown in European growth is likely to be protracted.
"In the end, it is mainly the prospect of the stuttering growth driver Germany that is contributing to the uncertainty regarding the EUR outlook," said Esther Reichelt, an FX strategist at Commerzbank in Frankfurt.
Traders are watching for Germany's Ifo business climate index later in the session and for any comments by European Central Bank President Mario Draghi later on Friday on further monetary policy easing.
The Australian dollar rebounded after tumbling more than 1 percent on Thursday, after Reuters reported the Chinese port of Dalian had banned imports of Australian coal indefinitely. China said on Friday imports would continue, but customs has stepped up checks on foreign cargoes.
That saw the Aussie rise to the day's high of $0.7117, ending 0.4 percent higher on the day.
The dollar weakened against a basket of major currencies. Thursday's U.S. economic data showed an unexpected decline in core capital goods orders, bolstering expectations the Federal Reserve will keep interest rates steady.
Investors continue to watch high-level talks between U.S. and Chinese trade negotiators in Washington. Just over a week is left before a U.S.-imposed deadline for an agreement expires, triggering higher tariffs.
With the economic outlook foggy and major central banks much more accommodative compared with a few months ago, U.S.-China trade talks and Brexit are the primary concerns for traders.
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