Lack of clarity on the U.S.-China trade negotiations kept markets wary about the tariff war’s result on the health of the global economy.
U.S. President Donald Trump threatened to “substantially” increase tariffs if China failed to agree a trade deal. He also took a swipe at European Union trade policies.
President Trump, in an economic address in New York, said his policies have fuelled America’s growth. But he gave little indication that a breakthrough in China trade talks was imminent. U.S. President Donald Trump said a trade deal was “close” but gave no new details on when or where an agreement would be signed, disappointing investors in what was billed as a major speech on his administration’s economic policies.
He also upset some investors by threatening China with even more tariffs if they do not sign a deal.
Mr. Trump spent portions of the speech defending his tariffs, accusing China of cheating the United States for years. He denied that his trade policy had created uncertainty for the economy.
The Trump administration has sent mixed signals about whether it would agree to roll back any of its existing tariffs on China as part of an initial agreement. Beijing has said easing tariffs is essential to any agreement. Administration officials said last week they expected tariff relief as part of Phase 1.
START TRADINGForex – Lack of clarity on Trump’s speech puzzled investors
Trump’s speech disappointed investors due to lack of clarity in what was billed as a major speech on his administration’s economic policies.
The dollar remained broadly firm against a basket of its rivals as weak risk appetite raised the greenback’s safe haven appeal. It edged 0.1% higher at 98.41.
Against the Japanese yen the dollar bought 109.06 yen – not far below the 5-1/2-month high of 109.48 it hit last week.
The Swiss franc rose 0.2% to 0.9908 per dollar, its strongest in a week. It rallied as much as 0.3% to a one-month high against the euro on Wednesday
The dollar scaled a month-high against the euro overnight and traded marginally below that level at $1.013 on Wednesday.
The New Zealand dollar soared after the central bank unexpectedly left interest rates on hold. The kiwi provided the standout performance in otherwise unremarkable currency markets on Wednesday. It had its biggest daily gain in a year. Against a broadly firm greenback, the kiwi was up 1.3% at $0.6407. The currency has been one of the worst performing majors this year, dropping 4.7%.
The Australian dollar was pinned at $0.6842 by weak, but largely expected, wage data.
The Sterling was slightly weaker against the U.S. dollar on Wednesday and stable against the euro. The British currency was last down marginally at $1.2834. Against the euro, the pound was flat at 85.72 pence.
Traders will be watching UK inflation data released at 0930 GMT.
Gold prices gained on Wednesday on lack of clarity on the U.S.-China trade negotiations. Spot gold rose 0.5% to $1,464.80 per ounce as of 1039 GMT. U.S. gold futures inched 0.8% higher to $1,465.60.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money