Positive vibes from Washington over the weekend renewed hopes in global markets that the two economic giants could soon sign an interim deal.
A Chinese state-backed newspaper reported that China and the United States were “very close” to an initial trade agreement. The report added to optimism from Friday, when the presidents of both countries reiterated their desire for a deal.
China said on Sunday it would seek to improve protections for intellectual property rights. Measures may include raising the upper limits for compensation for rights infringements.
On Saturday, U.S. National Security Adviser Robert O’Brien said an initial trade agreement with China was still possible by the end of the year. However, the main check on confidence has been rising tensions over Hong Kong. O’Brien said Washington would not turn a blind eye to what happens in Hong Kong. The comments added to worries that a Chinese crackdown on anti-government protests in Hong Kong could complicate the talks.
On the economic front, the greenback strengthened by better-than-expected U.S. manufacturing data on Friday. Positive signs for the U.S. economy and upbeat headlines on U.S.-China trade talks boosted investor confidence.
Later focus is expected to shift to German service-sector data and a speech from the ECB’s Chief Economist at 1800 GMT. Also, the U.S. Federal Reserve Chairman Jerome Powell makes a speech at 0000 GMT.
START TRADINGForex – Positive vibes from the trade battlefield
In currency markets, the dollar had rallied on Friday when U.S. manufacturing surveys beat forecasts, just as EU numbers disappointed. Export-focused currencies found support on Monday. Broadly, currency market volatility held near a record low on Monday as major currencies remained trapped in tight ranges.
The dollar touched its highest level since Nov. 14 against the euro at $1.1012. The greenback was steady at 98.278 against a basket of currencies, just below a two-week high.
The safe-haven yen retreated to a one-week low versus the greenback at 108.89 yen.
The day’s optimistic sentiment was enough to lift the trade-exposed Australian dollar 0.2% higher on the greenback to $0.6796.
The New Zealand dollar gained 0.3% to $0.6421. It rose 0.4% against the safe-haven Japanese yen to 69.83 yen.
The euro held near a 10-day low after posting a weekly loss. Investors remained cautious about the outlook for the euro zone economy in the near term. The single currency is on track for its biggest monthly drop since July 2019.
The pound climbed, too, on hopes for an imminent Brexit and an end to years of political paralysis. Sterling rose 0.1% to $1.2847, after British Prime Minister promised to bring a deal to leave the EU to parliament before Christmas. Boris Johnson’s Conservative Party leads in opinion polls ahead of the Dec. 12 election.
The oil prices rose on Monday on positive noises from trade war front. WTI crude rose 18 cents, or 0.31% to $57.95 a barrel by 0626 GMT. Brent crude futures were at $63.66, up 27 cents or 0.43%, the benchmark having also finished little changed last week.
Spot gold was 0.34% lower at $1,457.13, restrained by the bounce in the dollar.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money