Dollar Firm on US-China Tariffs Rollback
The dollar took a neutral stance on Monday, as traders awaited further updates on the US-China tariffs rollback.
The dollar index, which gauges the buck’s strength against a basket of six major currencies, was little changed at $98.26. It was not far from a four-week low.
Against the euro, the currency slightly moved at $1.1031, reflecting investors’ concern over the risk of a deal collapsing.
The greenback fell by 0.27% to ¥108.96 against the yen, as the unrest in Hong Kong continued.
The latest reports stated that a Hong Kong policeman fired live rounds at protestors, and at least one person was wounded.
Still, the Japanese currency held near its five-month high of ¥109.49 reached on Thursday.
News of the latest escalation of violence in the region hit the Chinese yuan as well, dropping 0.18% to $7.0078 in offshore trade.
Disappointing producer prices data also weighed on the yuan. The National Bureau of Statistics (NBS) showed on Saturday that the country’s producer price index (PPI) stumbled 1.6% in October.
That was the weakest year-on-year price decline since August 2016. It also revealed the result of both demand and supply pressures on the world’s second-largest economy.
Dollar Little Changed amid Hopes for US-China Tariffs Rollback
The greenback’s moves were minimal. Meanwhile, progress over current trade agreements between the US and China puts investors in a cautious position.
Both countries’ representatives stated last week that some of the duties would be withdrawn as part of a preliminary deal.
Although US President Donald Trump later denied the news, he did not entirely dismiss the possibility of a deal.
Market participants have become more cautious over the potential positive impact for global growth from a partial US-China trade deal following comments from President Trump, according to currency analyst Lee Hardman.
Nevertheless, Hardman sees market confidence to continue hopes that the US-China tariffs war, which has significantly struck the global economy, might be coming to a close.
A forex trader in Tokyo also stated that seeing China’s recent data, the US president could be telling the truth about China wanting a deal more than he did.
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