(Corrects EU election date in first par to next week (not thisweekend)
* Aussie at fresh 5-month low ahead of weekend vote
* Euro up as U.S. pushes auto tariffs back six months
* Upcoming EU elections hangs over market
* Tensions high as U.S. turns screw on China's Huawei
* Aussie dollar hurt as market prices in rate cut
* Swedish crown hit as risk sentiment dips
* Graphic: World FX rates in 2019 By Abhinav RamnarayanLONDON, May 16 (Reuters) - The euro edged higher against thedollar and sterling on Thursday as the threat of U.S. tariffs onautos was pushed back, though the rise was capped by unease overnext week's European parliamentary elections.
The single currency was up 0.1% at $1.1209 and up0.2% against sterling at 87.41 pence , adding to lategains in the previous session after U.S. officials saidPresident Donald Trump was expected to delay implementingtariffs on cars and parts by up to six months. "The news had a limited impact - the stock market reacted alittle bit more - but we think the euro will be much more aboutdomestic politics now," said Credit Agricole FX strategistManuel Olivieri.
"The risk is that we get more populist comments, such asfrom the Italian Deputy PM (Matteo Salvini). Italy remains oneof the factors keeping euro downside risks high."
Salvini said on Wednesday that EU budget rules were"starving the continent" and must be changed, a day after sayingItaly should be ready to break them. News on auto tariffs also provided some support for theJapanese yen , which was up 0.1 percent against the dollarin early trade, adding to a strong run for the currency.
"The yen is the pick of the bunch this week as well as thismonth as bond yields have fallen everywhere," said SocieteGenerale's head of FX strategy, Kit Juckes.
German 10-year bond yields moved below theirJapanese counterpart this month.
AUSSIE WOESWith the United States directing its trade-related iremostly at China, currencies more vulnerable to risk sentimenthave taken a hit.The Australian dollar, heavily exposed to economic shifts inChina, hit a five-month low on Thursday though this also had todo with bruising domestic economic data.
Australia's unemployment rate rose to its highest in eightmonths, cementing views its central bank may be forced to lowerborrowing costs soon to stimulate the economy. The currency dropped to $0.6893 in the Asian session thoughit clawed back the losses by mid-morning in Europe and wastrading around flat at $0.6933.
Money markets are wagering a rate cut might come very soon,with futures showing a 50-50 chance of a quarter-point easing inJune . A move to 1.25% was put at a 90% probability forJuly and was more than fully priced by August.In Europe, the Swedish crown led the losses,weakening 0.2% to 9.6145 per dollar, not far from the all-timelow of 9.661 it hit a week ago.
"The Aussie has remained under pressure with labour andunemployment data being what it is, while RBA rate cutexpectations have increased," said Manuel Olivieri, an FXstrategist at Credit Agricole.
Australia's 10-year bond yield hit an all-time low of1.639%. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^World FX rates in 2019 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Abhinav Ramnarayan;Editing by Andrew Cawthorne and John Stonestreet)
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