Home Featured Dollar Stays Weak Amid Rising Optimism Over U.S.-China Trade Talks

Dollar Stays Weak Amid Rising Optimism Over U.S.-China Trade Talks

Dollar Stays Weak Amid Rising Optimism Over U.S.-China Trade Talks

The U.S. dollar stayed weak against rivals on Friday as it lost its safe-haven appeal following the U.S.-China trade negotiations yielding an interim solution to the trade dispute between the world’s two largest economies.

The dollar index eased to 98.33, down 0.37% from previous close of 98.70.

U.S. President Donald Trump announced Friday afternoon that the two economic superpowers have reached a “very substantial phase one deal.”

Trump said the deal includes up to $40 to $50 billion in Chinese purchases of U.S. agricultural products as well as Chinese concessions on intellectual property and financial services.

In exchange for the concessions by China, the U.S. has agreed to hold off on an increase in tariffs originally scheduled for next week.

Trump said the agreement would take about three weeks to write and would likely be signed by both sides by the Asia-Pacific Economic Cooperation summit in Chile in November.

“Phase two will start almost immediately” after the first phase is signed, Trump said in an Oval Office meeting with China’s lead negotiator, Vice Premier Liu He.

Against the euro, the dollar was down 0.3% at 1.1038, recovering some lost ground after having weakened to 1.1063 a unit of euro.

Against pound sterling, the dollar weakened to 1.2648 a unit of sterling, as against $1.2444 Thursday evening. The sterling rose to $1.2686 earlier in the day, the best level since July 1.

Sterling rose amid hopes of progress in reaching a Brexit deal following constructive talks between Irish Primer Minister Leo Varadkar and U.K. Prime Minister Boris Johnson on Thursday.

The yen strengthened to 108.38 a dollar, up nearly 0.4% from 102.97 yen a dollar late Thursday.

The Aussie gained about 0.5% against the greenback with the pair trading at 0.6794.

Against the loonie, the dollar shed more than 0.6% at 1.3203, with upbeat Canadian jobs data supporting its currency. Data from Statistics Canada showed that employment rose by 53,700 jobs in September compared to economist estimates for an increase of about 5,000 jobs. That follows an increase of 81,100 jobs in August.

The unemployment rate fell to 5.5% in September from 5.7% in August. Economists had expected the unemployment rate to remain unchanged.

Against Swiss franc, the dollar was little changed at 0.9974.

In U.S. economic news, the Labor Department said its consumer price index was unchanged in September after inching up by 0.1% in August. Economists had expected another 0.1% uptick.

Another report from the Labor Department showed an unexpected increase in U.S. import prices in the month of September, although the report also showed an unexpected decrease in export prices. Import prices rose by 0.2% in the month, while export prices edged down by 0.2%.

According to preliminary data released by the University of Michigan, consumer sentiment in U.S. improved in the month of October, climbing to 96.0, after rising to 93.2 a month earlier. Economists had expected the index to drop to 92.0.

The material has been provided by InstaForex Company – www.instaforex.com