Forex Markets: Dollar Up on Positive Trade

FOREX MARKETS – The dollar reached a three-week high against the yen on Friday thanks to the apparent good news over the still-unsolved US-China trade war. However, foreign exchange markets were still subdued with investors seeking solid proofs of trade negotiation progress.

The dollar hit 111.8 against the Japanese yen, its highest in three weeks, as it held steady against other peers. Meanwhile, the Chinese offshore yuan gained 0.2 percent, trading at 6.7065.

The US dollar index, which compares the dollar’s strength against a group of six other currencies, was moving flatly. The forex trading session in Europe opened with most major pairs trading in tight ranges.

The pound gained 0.2 percent at $1.3093 while the Australian dollar perked up 0.2 percent at $0.71245, backed by the signs of progress in the trade spat between the US and China that also supported risk assets and commodity prices. The euro was firm at $1.1223, muffled by data on German industrial orders dropping in February.

US and China Closer to a Trade Deal

The US and China have been involved in high profile negotiations with the view of ending a months-long trade war that has disrupted markets and slowed down global economic growth. However, optimism was bolstered after US President Donald Trump said that the two sides are getting closer to hammering a deal.

“We’re getting very close to making a deal. That doesn’t mean a deal is made, because it’s not, but we’re certainly getting a lot closer,” said Trump. “And I would think with, oh, within the next four weeks or maybe less, maybe more, whatever it takes, something very monumental could be announced.”

However, Trump said that there were still key points to be discussed, even as key contentions such as tariffs and intellectual property have apparently been agreed upon.

Meanwhile, Chinese President Xi Jinpin assured Trump that the deal could be finalized soon, according to a messaged delivered by Chinese vice Premier Liu He.

“I hope the two sides’ trade teams can continue working in the spirit of mutual respect, equality, and mutual benefit to resolve each other’s concerns, and finish negotiations on the text of the China-US trade agreement soon,” said Xi to Trump via Liu.