G20 meeting, the imminent trade talks between China and USA and ears of an escalation in Iran tensions weighed on markets on Monday.
Investors are waiting to see if Presidents Donald Trump and Xi Jinping can de-escalate a trade war damaging the global economy. The leaders will meet during a G20 summit in Japan.
On Monday, Chinese Vice Commerce Minister said China and the U.S. should be willing to compromise in trade talks. U.S. Vice President Pence’s decision on Friday to call off a planned China speech was also considered a positive sign.
Still, most analysts doubt the two sides will come to any meaningful agreement. Tensions are reaching beyond tariffs, particularly after Washington blacklisted Huawei. US banned U.S. companies from doing business with the world’s biggest telecoms gear.
Economic woes, looming U.S. interest rate cuts and flaring tensions between Tehran and Washington drove safe-haven gold higher. Gold prices stood at $1,407.9 per ounce, not far from Friday’s six-year high of $1,410.78.
The rising tensions between Iran and the United States, after Iran shot down an American drone, also pushed oil prices higher. Brent crude futures stood at $65.16 per barrel, near Friday’s three-week high of $65.76. U.S. crude futures were up 0.7% at $57.84, its highest in over three weeks.
START TRADINGForex – G20 meeting, trade talks and Iran weigh on dollar
Investors focused their attention on whether Washington and Beijing could resolve their trade war at a G20 meeting in Japan later this week.
The dollar index slipped 0.1% lower to 96.11 after its biggest weekly drop in four months last week. The greenback has led a broad selloff in major currencies as global central banks signaled a dovish outlook on monetary policy. It fell 1.4% against other currencies last week.
The dollar fetched 107.29 yen, having slipped to as low as 107.045 on Friday, the lowest level since its flash crash on Jan. 3.
The euro rose to a three-month high of $1.1393 against the dollar. The common currency stretched its rally last week, when it added 1.4%.
Sterling was broadly steady as the leadership contest for the ruling conservative Party entered its final stretch. Jeremy Hunt faces rival Boris Johnson to replace outgoing Prime Minister Theresa May. The pound was a shade weaker against the euro at 89.31 pence.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money