Safe-haven sentiment was driven by hopes of a quicker resolution of the U.S.-China trade dispute. A potential trade feud with Europe deepened concerns over tepid economic growth.
Just days after reaching a truce on China trade, the U.S. Trade Representative’s office turned to Europe on Monday. A long-running dispute over aircraft subsidies, adding extra products to a list of EU goods that may be hit with tariffs, weighed on sentiment.
Markets also grew wary of the chances of a quick resolution to the year-long U.S.-China trade war after U.S. President Donald Trump’s comments that any deal would have to be tilted in favour of Washington.
Trade concerns and global growth worries weighed on dollar. The greenback struggled for traction, while U.S. bond yields fell to their lowest levels since late 2016. U.S. yields were also pressured by a drop in British yields after Bank of England Governor Mark Carney flagged uncertainties over Brexit. Trade conflicts prompted speculation that the central bank may lower interest rates such as other major central banks.
Markets also remain concerned over Britain’s chances of striking a Brexit withdrawal deal with the EU before the Oct. 31 departure deadline.
START TRADINGForex – Safe-haven sentiment lifted on growth fears
Investors will now focus on the release of U.S. economic data including non-farm payrolls on Friday.
Against a basket of six currencies, the dollar eased from Tuesday’s two-week highs to trade little changed on Wednesday at 96.736.
The dollar traded down at 107.70 yen, off Monday’s high of 108.535 hit after the weekend agreement between the United States and China to resume trade talks.
The sterling flirted with two-week lows after the PMI data and stood at $1.2568, on course for its fifth drop in the last six sessions.
The euro was steadier at $1.1282. The common currency was little changed following a volatile session on Tuesday.
Oil prices rose a touch after data showed U.S. crude inventories fell more than expected last week. However, it remained wobbly after a more than 4% dive on Tuesday, even after OPEC and allies including Russia agreed to extend supply cuts.
Brent crude futures traded at $62.85 per barrel, up 0.7%. West Texas Intermediate (WTI) crude futures rose 0.6% to %56.56 a barrel, following a 4.8% drop the previous day.
Gold prices touched a one-week high on Wednesday, driven by upbeat safe-haven sentiment. Spot gold was up 0.5% at $1,425.64 per ounce, as of 0711 GMT. Earlier in the session, the bullion hit $1,435.99, a peak since June 25.
Silver rose 0.2% to $15.33 per ounce.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money