Currency Markets Wait for Trade Results
The currency markets are in a wait-and-see mode at the start of the crucial week for trade talks. Tuesday saw modest moves among dollars and other currencies.
Against a basket of other major currencies, the dollar didn’t move much. Overall risk appetite was weak, with news of reluctance on the Chinese side to pursue a deal.
On Thursday and Friday, high-level trade talks between US and Chinese officials will take place.
The dollar index traded down 0.02% at 98.792. Worries over the trade war pummeled currencies with links to trade, like the Australian dollar, which lost 0.34%.
Hedge funds have added to have increased their long dollar positions. They reached a nine-week high, according to the Commodity Futures Trading Commodities data.
Elsewhere, the UK is still scrambling for a Brexit deal with the EU. Germany, on the other hand, offered more dismal data this week.
Over in Turkey, the lira fell to record lows.
Lira Currency Declines on Trump Threats
Over in Turkey, the lira reached its weakest level in a month yesterday. Investors were anxious about the country’s incursion in Northern Syria.
The news of the incursion summoned US President Donald Trump’s threat prowess. He warned that he would destroy Turkey’s economy if it does something he didn’t like.
Lira weakened to 5.8415 against the dollar, the weakest since September 2.
Trump said that he would “destroy and obliterate” the country’s economy if it took action against Syria.
Trump decided to pull out 50 American special forces troops from Syria last Sunday. This move left Kurdish forces in Syria that consider the US as their ally.
They would be vulnerable to the Turkish military’s incursion. Turkey has branded the Kurdish forces as terrorists.
The tensions between the US and Turkey, both NATO members, started when Turkey decided to buy Russian missile defense systems. The two sides have also disagreed over Syria’s policies.
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