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Tuesday, 19 November 2019 00:00 - - {{hitsCtrl.values.hits}}
Tokyo/Singapore (Reuters): Major currencies marked time on Monday as traders looked to whether Washington and Beijing can soon sign off on a deal to end a trade war that has been a drag on global economic growth.
Faint optimism for a breakthrough was supported by a report on Sunday from Chinese state news wire Xinhua, which said the two sides had “constructive talks” over the weekend. “It all sounds promising,” said Marshall Gittler Chief Strategist at FX analysis firm ACLS Global. “But China has made rolling back some of the tariffs a precondition for the agreement and it’s not clear whether Trump will agree to that...so net-net, it’s still up in the air.”
Against the safe-haven yen, the dollar a lifted a little to 108.81 yen.
The euro stood at $1.1062, bouncing back from a one-month low of $1.0989 set on Thursday. That helped to push down the dollar index to 97.905, its lowest level since 7 November.
“Markets are on the prowl for good news but exchange rates are likely to remain range-bound in the quiet week ahead,” said Eugene Leow, rates strategist at Singapore’s DBS Bank.
The liveliest mover was the British pound, which rose 0.2% to a two-week high of $1.2929 after Prime Minister Boris Johnson said all Conservative Party candidates at the 12 December election had pledged to back his Brexit deal.
It was also supported by fresh opinion polls pointing to a Conservative victory.
The Australian dollar traded down 0.2% at $0.6809, while the kiwi was marginally higher at $0.6400.
The Chinese yuan, the most sensitive currency to the trade dispute, edged lower to 7.0106 per dollar.
“USD/CNY above 7.0 suggests that the market is not yet convinced a solution is near,” said Gittler.
The US-China tariff war has taken a toll on the world’s manufacturing.
Data from the US Federal Reserve on Friday showed the US manufacturing downturn deepened in October, while China data out last Thursday also showed a slowdown.
