Investors seek the greenback shelter on news that the Trump administration was considering delisting Chinese firms from U.S. stock markets.
The Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from U.S. stock exchanges. China warned of instability in global markets from any “decoupling” with the United States.
Worries that negotiations between China and the United States will not lead to a trade deal have unnerved investors and boosted demand for dollars. Deepening political uncertainty in the United States after the start of an impeachment inquiry into President Donald Trump weighed too.
China hopes Beijing and Washington will resolve their trade dispute “with a calm and rational attitude”, ahead of talks in two weeks. The two economic giants have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other’s goods. The trade saga roiled financial markets and threatening global growth.
Market players downplay the likelihood of such radical escalation of the U.S.-China trade war.
START TRADINGForex – Delisting Chinese firms on Trump’s list
Investor sentiment remained fragile. Traders are expecting calmness in trade-war headlines as China takes a week-long holiday from Tuesday.
The dollar index was little changed at 99.117, while against the euro it stood at $1.0945. The dollar earlier this month hit a more than 2-year high of 99.37.
The New Zealand dollar slid to a 4-year low after business confidence tumbled. New Zealand’s dollar dropped 0.6% to as low as $0.6249, its weakest since 2015.
In Australia, forecasts for a rate cut on Tuesday firmed with gathering economic gloom. The Australian dollar fell 0.2% to $0.6751.
The Japanese yen firmed 0.2% to 107.75 yen per dollar on expectations of monetary easing..
The euro extended its fall on Monday and headed for a new two-year low. The single currency weakened 0.3% to as low as $1.0906. The euro hit its weakest since 2017 last week, at $1.0904, weighed down by dollar strength. It also extended losses against sterling, falling half a percent to 88.56 pence.
Sterling inched higher on Monday after a week of hefty losses. The British currency showed little reaction to data pointing to a contraction in the UK economy. The focus remained squarely on Brexit news. By 1100 GMT the pound was up 0.1% at $1.2304, having fallen 1.6% last week to three-week lows.
Oil prices slipped on Monday as China’s economic outlook remained weak even as manufacturing data improved. The ongoing trade war with the United States weighed on demand growth for the world’s largest crude importer.
Brent crude LCOc1 futures fell 81 cents, or 1.3%, to $61.47 a barrel by 0136 GMT. U.S. WTI crude futures were 35 cents or 0.63% lower at $55.56 a barrel.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money