Breaking News
0

Forex - Dollar Lower Amid Unease over U.S. - China Trade Truce

ForexDec 04, 2018 09:02
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com - The dollar fell to more than one-week lows against a basket of the other major currencies on Tuesday as relief over the U.S.-China trade truce gave way to concerns that a full resolution to the trade conflict will be difficult to reach.

Optimism over a breakthrough in the trade war dimmed after statements on Monday by various Trump administration officials shed little light on the specifics of any Sino-U.S. trade agreement.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.45% to 96.53 by 03:56 AM GMT (08:56 AM GMT), the lowest level since Nov. 23.

Moves in bond markets also pointed to concerns over the tentative ceasefire between Beijing and Washington.

Yields on 10-year U.S. Treasuries, which move inversely to prices, continued to tick lower after dropping below the 3% level on Monday, touching the lowest level since mid-September.

"Falling U.S. yields are a negative for the dollar, especially versus the major currencies," said Rodrigo Catril, senior currency strategist at NAB.

The curve between 3-year and 5-year notes inverted for the first time since 2007 on Monday.

The 2-year and 10-year yield curve is a key focus for investors as an inversion is seen as predictor of a U.S. recession. A yield curve is said to be inverted when yields on longer-dated maturity bonds are lower than shorter-dated bonds.

The yield curve has flattened as continuing interest rate hikes send short-dated yields higher, while longer-dated Treasury yields are kept down by tepid inflation and slowing global growth.

Catril added that U.S. Treasury yields are near crucial technical support levels, a break of which could add further pressure on U.S. yields and the dollar.

The dollar index rose to the highest levels of the year in early November boosted by expectations for a faster pace of rate hikes by the Federal Reserve as the U.S. economy remained robust.

But the dollar has come under pressure since comments by Fed Chairman Jerome Powell last week were interpreted by markets as an indication that the central bank could slow its program of rate hikes.

The Fed is widely expected to raise rates at its upcoming Dec. 18-19 meeting and has indicated that it could raise rates three times in 2019, but markets are currently pricing in just one rate hike next year.

The dollar fell to more than one-week lows against the yen, with USD/JPY down 0.62% 112.96.

The euro was higher against the softer dollar, with EUR/USD adding on 0.26% to trade at 1.1384.

The pound also gained ground, with GBP/USD rising 0.39% to 1.2772, after falling below the 1.27 level on Monday for the first time since Oct.31.

Sterling has posted losses for three consecutive weeks as traders bet that British Prime Minister Theresa May will not be able to pass her Brexit deal through parliament on Dec. 11.

-- Reuters contributed to this report

Forex - Dollar Lower Amid Unease over U.S. - China Trade Truce
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email