* Poor German data, Draghi warning, weighs on singlecurrency
* UK PM May loses historic vote, no-confidence motion called
* Second referendum hopes boosts pound against euro
* Graphic: World FX rates in 2018 (Recasts; updates prices; adds analyst quote; changes byline,changes dateline from LONDON to NEW YORK)By Kate DuguidNEW YORK, Jan 16 (Reuters) - The dollar rose against theeuro on Wednesday as the single currency was pushed lower byworries about the euro zone economy, while sterling was strongahead of a no-confidence vote in British Prime Minister TheresaMay's government.
The euro was down 0.13 percent against the dollar, last at$1.140, after being compressed earlier in the session to a12-day trough of $1.138. Earlier this week, data showed Germanybarely escaped a recession in the second half of 2018 andEuropean Central Bank chief Mario Draghi warned on Tuesday theeuro zone economy was weaker than anticipated."The dimmer outlook was acknowledged by outgoing ECBPresident Mario Draghi, a cautious tone that gave added tractionto the euro's slide from three-month highs," said Joe Manimbo,senior market analyst at Western Union."Add it all up and it seems increasingly less likely thatthe ECB would be able to normalize monetary policy later thisyear."
In Britain, May is widely expected to retain power in theconfidence motion at 1900 GMT on Wednesday, called by oppositionLabour Party leader Jeremy Corbyn after a crushing defeat of theprime minister's Brexit divorce deal in parliament on Tuesday.
Defeat of the deal left the country's withdrawal from theEuropean Union in disarray just 10 weeks before it is due toleave. Although the pound had sunk by more than 1 percent againstthe dollar early on Tuesday, it rallied after the parliamentaryvote on the deal as investors saw the defeat as forcing Britainto pursue different options regarding the EU."One thing seems clear - this deal they voted on is nowdead, I doubt they can make a few tweaks and salvage it," saidRichard Falkenhall, a senior FX strategist at SEB.
"You have to look at alternatives to them: there is nosupport in parliament for a no-deal Brexit so you end with asofter Brexit, or maybe even a second referendum," he said.
Adam Cole, chief currency strategist at RBC, added that ifthe Labour Party lost the confidence vote as expected, it couldswitch its focus to a second referendum on EU membership.As a consequence, the single currency fell as much as 0.3percent against the pound in early trade, hitting aseven-week low of 88.44 pence, and was trading at around 88.55pence by 1524 GMT, down 0.21 percent on the day.
The dollar eased 0.17 percent to 108.83 yen afteradvancing 0.5 percent against its Japanese peer overnight, amida further ebb in risk aversion with U.S. stocks posting stronggains. (Reporting by Kate Duguid and Abhinav RamnarayanEditing by Frances Kerry)
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