NEW YORK, NY – The US dollar slipped as confusion over the US-China trade deal continues. Meanwhile, the EUR/GBP appears to be heading to new lows.
US President Donald Trump’s confusing statements over the trade agreement with China has led to investors becoming overly cautious. Trump commented on Tuesday that he has no deadline for the trade deal and even said it might be better to wait after the 2020 elections. He then turned optimistic on Wednesday and said the talks were going “very well.”
A Bloomberg report that stated the countries were closer to finalizing a deal saw the markets rebounding. However, the effect on the world’s primary currencies were more muted.
The US dollar index slipped by 0.1%. Aside from the trade deal, forex traders are also biding their time and waiting for the country’s non-farm payroll report which is set to be released on Friday. It will indicate how America’s economy is faring against the worldwide slowdown.
The safe-haven yen remained at 108.86 per dollar while the Swiss franc moved up to 0.9879 to a dollar. The euro also inched higher than the dollar and ended the day at 1.1083. The EUR/USD attempted to extend its momentum but found itself boxed in at 1.1115 as the bears returned. It also pushed the pair to the 1.1066 to 1.1089 range.
As for the USD/JPY, the previous support has transformed to a resistance at about 108.90. It became quite an obstacle for the bulls and brought the pairs upward movement from 108.40 to an end. The price move was reportedly due to an optimistic market sentiment caused by news on the trade deal.
Meanwhile, the pound enjoyed an eight-month high as it crested in anticipation of a win from Prime Minister Boris Johnson. If he does win the majority next week, it could finally ease the way for Britain to say goodbye to the EU come January.
The GBP/USD’s strong performance yesterday helped in breaking from the 1.2820 to 1.3007 range. The pair appears to be continuing its upward move as the first resistance is set at 1.3170. However, analysts are expecting the EUR/GBP to hit new lows this year as the cross has eroded to .8465.
The Australian dollar dropped 0.6843 after a disappointing retail sales information was revealed. The New Zealand dollar had a better run. The kiwi rose to 0.6562 overnight. It was the strongest it has achieved since August. It closed at 0.6536 today though.