Money Exchange: Dollar Declines on US-China Trade Talks Conclusion
MONEY EXCHANGE – On Friday, the dollar declined after reaching a short high earlier in the day. This followed the conclusion of the trade talks between the United States and China that has produced minimal progress.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, decreased to 0.1% to 95.44.
The trade talks between the Washington and Beijing happened within two days and ended on Thursday without any major developments.
“We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship,” said White House spokeswoman Lindsay Walters.
Meanwhile, there was a new set of US tariffs that had imposed on Chinese goods worth $16 billion. China has also retaliated with the same amount of tariffs on US imports.
The focus of investors is expected to turn on the speech of Federal Reserve Chairman Jerome Powell on Friday at the annual meeting of central bankers at Jackson Hole, Wyoming. Moreover, markets will be observant on anything related to the Fed chief’s conservation on the independence of the central bank following the comment of U.S. President Donald Trump, saying he is “not thrilled” about the recent hikes. As per reports, Trump said he was expecting Powell to be a cheap-money chairman at a fundraiser.
“I think Powell may imply that regardless of political pressure the Fed may continue with rate hikes as long as the U.S. economy keeps expanding. If the market can confirm that, then I think the dollar’s strength will continue, especially against the yen, and dollar/yen will head for 112 or the July high of around 113,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
The USD/JPY pair made a gain of 0.1% to 111.41. On Thursday, the greenback closely increased to 0.7% against the Japanese Yen after the release of Fed’s minutes indicating plans to hike rates soon.
Meanwhile, the AUD/USD pair inverted its losses to trade a further high of 0.5% to 0.7285 following the Liberal party cast votes to Treasurer Scott Morrison in becoming the next Australia’s prime minister.
Further, the Hong Kong dollar was put in the limelight after the repeated intervention of the Hong Kong Monetary Authority (HKMA) which the city’s de facto central bank. The central bank also made a purchase of local currency worth HK$1.8 billion ($225 million) to maintain its peg with the greenback following the increase of dollar after the U.S.-China talks’ conclusion.
Money Exchange: Turkish lira softens fairly on escalating US standoff
MONEY EXCHANGE – On Friday, the Turkish lira softened fairly in battling with the dollar on the escalating US standoff with the fate of an American pastor being tried in Turkey.
The lira softened to 6.1079 against the greenback from a close of 6.0950. The Turkish currency w=eakened to 1% after the accusation of the Turkish President Tayyip Erdogan’s spokesman to the United States of pursuing “economic war”.
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