Predictions of future growth and bets the United States and China can end their damaging trade war with a truce boosted markets.
The world’s two largest economies are in talks on an initial deal to reach truce in a 16-month trade dispute. The phenomenal US-China trade war has damaged supply chains and upset global markets, with Washington due to impose a new round of tariffs on Chinese goods from Dec. 15.
A lack of clear news has not deterred investors emboldened by a growing sense that the risks of a global recession have receded. Unfazed by the lack of clarity on trade, markets focused on a growing sense of positive economic fundamentals ahead.
The 16-month trade war between the world’s two biggest economies has slowed global growth and has taken a toll on the world’s manufacturing. The fallout from the tit-for-tat tariff dispute has already led to a slowdown in China and shown up in some economic indicators in the United States.
Investors await the release of the minutes of the U.S. central bank meeting at end-October when policymakers had cut interest rates.
START TRADINGForex – Investors maintain bets on trade war truce
The US dollar stabilized after three consecutive days of losses but remained trapped within well-worn ranges. The dollar index gained 0.1% to 97.868, close to a two-week low after weakening 0.6% in the last three days.
Dollar’s gains were most pronounced against the perceived safe-haven currencies of the franc and the yen, rising 0.2% against both.
The Australian dollar fell 0.16% to $0.6799 and declined 0.26% to 73.82 yen. Australia’s central bank agreed “a case could be made” for another cut to its 0.75% cash rate at its November meeting.
The British pound slipped 0.1% to $1.2933 after hitting a one-month high overnight. The sterling buoyed by polls pointing to a victory by the ruling Conservatives in upcoming elections on the Dec. 12. Sterling was last down by 0.2% at 85.65 pence against the euro, still close to the six-month high reached on Monday.
Gold prices held steady on Tuesday, after hitting its highest since Nov. 7 earlier in the session. Spot gold was little changed at $1,471.90 per ounce as of 0559 GMT. U.S. gold futures inched up 0.07% to $1,472.90 per ounce.
Oil prices fell for a second day on Tuesday, dropping to around $62 a barrel as trade talks drag on. Brent crude, the global benchmark, was down 70 cents at $61.74 a barrel at 1316 GMT. It had reached $63.65 — the highest since Sept. 24 — on Thursday. WTI crude dropped 73 cents to $56.32.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money