After displaying some strength early on in the session, the U.S. dollar stayed around the flat line for much of the session on Monday, ahead of some crucial economic data from across the globe.
A disappointing jobs report had rendered the dollar weak last Friday. This week, data on retail sales and consumer price inflation are due and the dollar’s movements will depend largely on these data during the course of this week.
Optimism about U.S.-China trade deal supported the dollar. The two countries are set to sign the phase 1 trade deal at the White House on Wednesday. The deal is likely to include a commitment from China to increase agricultural products and implement economic reforms as well as some relief to China’s aquatic exports to the U.S.
Treasury Secretary Steven Mnuchin said in an interview on Sunday that the agreement calls for China to purchase $40 to $50 billion worth of U.S. agricultural products annually.
Mnuchin described the agreement as “very, very extensive,” although the deal will not completely resolve the trade dispute between the U.S. and China.
Traders were also looking ahead to the quarterly earnings reports from top U.S. banks this week.
The dollar index advanced to 97.53 early on in the day, but dropped to 97.31 a llittle before noon and then moved around the unchanged line for much of the session. It was last seen at 97.37, up marginally from previous close.
The dollar gained against British Pound Sterling after data from the Office of National Statistics showed the U.K.’s gross domestic product contracted 0.3% on month in November, driven by falls in services and production. GDP had advanced 0.1% in both September and October. The dollar strengthened to $1.2989, gaining nearly 0.6% from previous close of $1.3063.
Against the Euro, the dollar was weaker at $1.1138, compared to $1.1122 on Friday.
The Japanese yen weakened to 109.95 a dollar, from 109.46 yen a dollar in the previous session.
The dollar was little changed against the Aussie and loonie. While the Aussie quoted at 0.6903 against the dollar, gaining marginally, the dollar edged up to 1.3057 against the loonie.
The dollar was weak against Swiss franc, with the pair trading at 0.9709.
The material has been provided by InstaForex Company – www.instaforex.com