LONDON, U.K. – The US dollar boosted as optimism on the Trade deal between the US and China increases with more upbeat trade talk updates.
The US dollar pushed significantly higher on Wednesday, reaching nearly at the $1.10 level compared to the euro. The gain was mostly powered by more optimistic updates from both the US and China to resolve the long-standing trade war.
Early this week, the greenback has already risen due to a more optimistic tone on US-China trade agreements. It further gained momentum on Wednesday against the yen, going towards the three-week highs.
On the other hand, there was little new data about the Eurozone on Wednesday, except for the several revisions in the US ahead of the Thanksgiving holiday on Thursday.
According to a post made by an analyst in Commerzbank, from current data, the US is more likely going to string support for the dollar, suggesting that the EUR/USD pair might possibly go down below the $1.10 value again before the trading session ends.
The EUR/USD pair has been massively stuck within the tight trading ranges as the pair’s volatility continues to stay at the low levels without any monumental catalysts to help boost it up, such as monetary policy shifts.
Market players are also growing with more optimism towards the trade deal between the US and Beijing as the US President Donald Trump stated overnight that the US is reaching towards the final throes to defuse the long-standing trade war against China.
On the other hand, a lot of market analysts stated that investors are struggling to comprehend whether the perky risk-on mood and the increasing trade optimism are positive towards the safe-haven dollar, particularly as the Federal Reserve has been imposing lower interest rates.
According to an analyst at the BNY Mellon, Neil Mellor, the risk-on has been going on for a few days down, putting the euro/dollar pair at the $1.10 level, which, according to him has bought the US dollar compared to the opposite that happened in the past.
On the other hand, the euro has been going down, slipping about 0.1% towards the $1.1011 levels, nearly around its previous two-week low at $1.0989.
Compared to other currencies, the US dollar index also has risen by about 0.1% towards the 98.352 marks.
The Japanese yen has also struggled in the recent sessions amid the soaring equity markets. Against the yen, the US dollar has gained another 0.1% on Wednesday. The Australian dollar has also skidded by about 0.1%, going towards $0.6779 as market players go in favor of more ease on the Reserve Bank of Australia.