U.S. dollar recovered after early weakness on Wednesday but turned quite subdued past noon and stayed below the flat line thereafter, as traders awaited news about the progress on the U.S.-China trade front.
Despite reports that the U.S. and China are likely to sign an interim trade deal sometime in the foreseeable future, a lack of clarity on this rendered the dollar’s movements lackluster.
According to a report from Reuters, a meeting between President Donald Trump and Chinese President Xi Jinping could be delayed until December.
A senior Trump administration official told Reuters discussions continue over terms of phase one of the trade deal and a venue for a meeting between Trump and Xi.
The official said China’s latest push for more tariff rollbacks was not expected to derail progress toward an interim deal but noted that it was still possible an agreement would not be reached.
The dollar index, which was down at 97.78 in early trades, recovered gradually to 97.98 by early afternoon, but was still trailing its previous close.
Against the Euro, the dollar was quoting at $1.1068, recovering from an early low of 1.1094.
The euro area private sector expanded slightly more than initially estimated in October but remained close to stagnation, final data from IHS Markit showed.
The final composite output index rose to 50.6 in October from 50.1 in September. The score was above the flash estimate of 50.2.
Data from Eurostat showed Eurozone retail sales grew only marginally in September largely reflecting weak food sales.
The Pound Sterling weakened against the dollar and was last seen hovering around $1.2855, compared to previous close of $1.2883.
The Japanese Yen staged a smart recovery by noon, but shed ground subsequently. Around late afternoon, a dollar fetched 109.00 yen.
The Aussie was down against the dollar with the pair quoting at 0.6885. The dollar gained about 0.2% against the loonie at 1.3184, and was little changed against Swiss franc.
On the U.S. economic front, preliminary data released by the Labor Department showed labor productivity in the U.S. unexpectedly edged lower in the third quarter.
The report said labor productivity dipped by 0.3% in the third quarter after spiking by an upwardly revised 2.5% in the second quarter. Economists had expected productivity to climb by 0.9% compared to the 2.3% jump originally reported for the previous month.
Meanwhile, the Labor Department said unit labor costs soared by 3.6% in the third quarter after surging up by a downwardly revised 2.4% in the second quarter.
Economists had expected unit labor costs to jump by 2.2% compared to the 2.6% spike originally reported for the previous month.
The material has been provided by InstaForex Company – www.instaforex.com