Mixed messages from China about the trade war gave risk appetite only a limited boost. Conflicting headlines about trade deal left markets almost unmoved.
After a week of mixed signals over the likelihood of a preliminary trade deal, the latest developments did little to move markets. China renewed its offer to work further on the deal.
Chinese President Xi Jinping said Beijing wants to work out a deal with Washington. He added that he has been trying to avoid a trade war – but is not afraid to retaliate when necessary.
Both sides keep communication channels open. China has invited top U.S. trade negotiators for a new round of face-to-face talks in Beijing amid continued efforts to strike at least a limited deal. U.S. officials have indicated they would be willing to meet in person but have not committed to a date.
Officials from Beijing had suggested that Chinese President and U.S. counterpart might sign a deal in early December. But completion of a phase one deal could slide into next year. Beijing presses for more extensive tariff rollbacks and the U.S. administration counters with heightened demands of its own.
This week has seen a hardening of rhetoric from both sides, prompting investors to scale back optimism.
START TRADINGForex – Mixed messages about trade deal once again
Volatility for major currencies has rarely been lower. Markets were unmoved by Christine Lagarde’s first policy speech as president of the European Central Bank.
The dollar was little changed on Friday with currencies trading in tight ranges. Against a basket of currencies, the dollar hovered around zero, heading for its smallest weekly change since the start of August.
The Japanese yen – also seen as a safe haven – was up less than 0.1% against the dollar.
But the trade-exposed New Zealand dollar was up 0.2% against the U.S. dollar and the Australian dollar also lifted slightly.
The Swiss franc was down around 0.1% against both the dollar and the euro, suggesting market optimism.
The euro, which had been up as much as 0.3% versus the dollar in early London trading. The common currency then turned negative and touched a weekly low after euro zone flash PMI data fell short of expectations. It was last at zero net change against the dollar, at $1.10585.
The pound dived on Friday. It is set for a weekly loss after surveys showed British business suffered its deepest downturn since mid-2016. Caution rises before a Dec. 12 general election. Against the dollar, the pound edged 0.25% lower at $1.2864 while it weakened against the euro to 85.85 pence.
The oil prices held near two-month highs on Friday and were set for a third consecutive week of gains. Oil boosted by expectations of an extension to OPEC+ production cuts although doubts over U.S. – China trade talks capped gains. Brent crude futures dropped 6 cents to $63.91 a barrel by 0908 GMT. West Texas Intermediate (WTI) crude futures fell 21 cents to $58.37 per barrel.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money