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Dollar Stays Positive

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Dollar Stays Positive

The U.S. dollar turned in a mixed performance against its major rivals on Monday, even as the dollar index spent much of the day’s session in positive territory.

The dollar slipped a bit by mid morning, but recovered swiftly and stayed above the flat line thereafter amid optimism the U.S. and China will sign an interim trade deal by the end of the year.

A tabloid run by China’s ruling Communist Party discounted “negative” media reports and said the economic superpowers are “very close” to a phase one deal.

The state-backed Global Times said on Twitter that China also remains committed to continuing talks for a phase two or even a phase three deal with the United States.

China has offered to raise penalties on intellectual property violations in an attempt to hammer out a partial trade deal with the United States.

U.S. national security adviser Robert O’Brien said an initial trade deal was still possible by the end of the year.

U.S. President Donald Trump and Chinese President Xi Jinping have also recently made positive comments about a potential trade deal despite reports of complications arising that could delay the agreement until next year.

The dollar index eased to 98.17 around mid morning from a high of 98.32, but edged higher soon and was last seen at 98.32, up marginally from previous close.

Against the euro, the dollar was up at $1.1010, compared to Friday’s close of $1.021.

German business confidence rose to a four-month high in November, suggesting that the economy is set to continue to expand moderately in the fourth quarter.

The business confidence index rose to 95.0 in November from 94.7 in October, survey data from ifo institute showed.

The institute said the German economy is showing resilience. The largest euro area economy is likely to grow 0.2% in the fourth quarter, the think tank said.

The Pound Sterling was stronger against the greenback, with a unit of Sterling fetching $1.2898, compared with $1.2832 on Friday.

The Japanese Yen was lower by about 0.3% at 108.94 a dollar. The International Monetary Fund downgraded its growth projection for Japan and urged the government to take fiscal policy that supports near-term growth and stimulate price momentum.

According to the concluding statement of the 2019 Article IV mission to Japan, the country’s economy is set to expand 0.8% this year, which was slower than the previous forecast of 0.9%.

For 2020, real GDP growth is projected to slow to 0.5%, as external demand remains soft and dampens export-related investment.

The dollar was up slightly against the loonie at 1.3304. Data from Statistics Canada showed wholesale trade in Canada rose 1.0% to $65.1 billion in September, nearly offsetting the 1.2% decline in August.

Sales were up in five of seven sub-sectors, representing 82% of total wholesale sales.

The dollar shed ground against the Aussie and Swiss franc, with the AUD-USD and Dollar-Franc pairs trading at 0.6775 and 0.9969, respectively.

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