As the United States and China are in the making of a “phase one” trade deal, hopes of a breakthrough have boosted sentiment.
Latest reports on the trade front said the world’s top two economies were still working out the details of a “phase one” trade deal, which could be signed later this month.
But after sizeable moves on Tuesday currency markets moved into wait-and-see mode. That sentiment was echoed in global stock markets, which steadied after a three-day rally.
The dollar drifted lower against other major currencies on Wednesday as investors awaited fresh developments in the U.S.-China trade talks. The dollar index was a fifth of a percent lower at 97.798 after rising 0.4% the previous day.
A survey of the vast U.S. service sector published showed that business sentiment had improved in October from a three-year low in September. That followed a strong U.S. employment report on Friday. Experts said better-than-expected U.S. economic data in the past week had eased expectations for further easing from the U.S. Federal Reserve. The data boded well for the dollar outlook.
Optimism around a U.S.-China trade truce drive a rally in stocks.
START TRADINGForex – Phase one trade deal in the making
Global stock markets steadied near record highs, supported by rising optimism about a U.S.-China trade deal this month.
The U.S. dollar was 0.2% softer at 109.01 yen, although still within sight of a three-months high hit last week.
The Canadian dollar edged lower against its U.S. counterpart on Wednesday, trading in a narrow range. Investors awaited the outcome of the Phase One trade deal making and Canada’s jobs report loomed at the end of the week. The loonie was trading 0.1% lower at 1.3170 to the greenback, or 75.93 U.S. cents.
The generally positive mood supported the risk-sensitive Australian dollar, which changed hands at $0.6899. It was little changed on the day but has maintained gains of 3.4% since hitting a 10-1/2-year low on Oct. 2.
The Swiss franc changed hands at 0.9929 to the dollar, little changed on the day, following its 0.5% fall the previous day.
The euro, meanwhile, was a touch firmer at $1.1089, having dropped 0.5% against a broadly robust greenback on Tuesday.
U.S. crude oil futures were up 0.1% at $57.28 a barrel. It turned higher after being pressured by a larger-than-expected build in U.S. crude stocks and weak euro zone economic figures.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money