The U.S. dollar suffered a setback of sort in early trades Monday, but started edging higher post noon as traders looked ahead to the upcoming trade talks and the release of the minutes of the Federal Reserve’s recent policy meeting.
Uncertainty about the trade talks between the U.S. and China making any significant progress weighed on equities and helped the dollar’s modest uptick.
The minutes of the Federal Reserve’s monetary policy meeting held on September 17 and 18, is due on Wednesday. Investors will be looking for clues about the central bank’s outlook for further rate cuts in the near future.
The dollar index, which edged down 98.74 around mid morning, rose to 99.01 later on in the session and stayed firm thereafter. It was last seen at 98.97, up 0.16% from previous close.
Against the euro, the dollar recovered after weakening to 1.1001 and was up marginally in late afternoon trades with a unit of euro fetching $1.0972.
In economic news from Europe, Germany’s factory orders declined at a slower pace of 0.6% in August, after having declined 2.1% in July. Economists had forecast a 0.4% drop.
Eurozone investor confidence weakened to its lowest since early 2013 in October on fears of recession despite stimulus measures announced by the European Central Bank, survey results from the behavioral research institute Sentix showed on Monday.
The pound sterling was weaker by about 0.3% with a single unit fetching $1.2298, as compared to $1.2334 on Friday.
The Japanese yen traded weak as well against the dollar, at 107.28 a dollar, down more than 0.3%, from late Friday’s level of 106.93 yen a dollar.
The dollar was down marginally against the loonie and Swiss franc, with the respective pairs trading at 1.3307 and 0.9949, respectively.
Against the Aussie, the dollar was up by about 0.6% with the AUD-USD pair at 0.6730.
In U.S. economic news today, U.S. consumer credit climbed by $17.9 billion in August after surging up by a revised $23.0 billion in July, a report from the Federal Reserve showed.
Economists had expected credit to increase by $15.5 billion compared to the $23.3 billion spike originally reported for the previous month.
On the trade front, U.S. President Donald Trump said on Friday his administration had a “very good chance” of agreeing a trade deal.
Meanwhile, a report in Bloomberg, citing some people familiar with the discussions, said Chinese officials are reluctant to agree to a broad trade deal pursued by U.S. President Donald Trump.
Specifically, Premier Liu He is said to be ruling out commitments to reform Chinese government subsidies or industrial reform.
The material has been provided by InstaForex Company – www.instaforex.com