Dollar edges up ahead of potentially market-moving Trump trade speech
The dollar was stronger against the yen and Swiss franc on Tuesday as traders grew optimistic ahead of a speech by U.S. President Donald Trump, during which he is expected to again postpone imposing tariffs on European Union autos.
Trump’s speech to the Economic Club of New York is expected to be market-moving as he is scheduled to discuss U.S. trade policy. Currency traders will also be listening for hints about the Trump administration’s long-running trade war with China, and any progress towards the “phase one” trade deal.
“The market has obviously been quite wary about whether a phase one deal is on or not – a lot of hopes are being placed on this speech one way or another,” said Jane Foley, senior forex strategist at Rabobank.
“We just don’t know which way he’s going to go,” she said, as Trump can be “very impulsive” and therefore difficult to predict.
“I suspect that he will provide just enough encouragement to indicate that there is reason to be hopeful, without probably saying that it’s a done deal,” Foley said.
Versus a basket of currencies, the global dollar index rose 0.1%.
The dollar strengthened against safe haven currencies: it was up 0.2% against both the Japanese yen
The euro was down by 0.1% against the dollar at $1.10225
The New Zealand dollar was down 0.5% at 0.6335 versus the U.S. dollar, only slightly recovered from the low of $0.6323 it reached last week
The offshore Chinese yuan was flat against the dollar at around 7, a threshold it crossed for the first time in August
In Hong Kong, riot police fired tear gas at a university campus on Tuesday, a day after a protester was shot and a man set on fire in some of the most dramatic unrest to rock the Chinese-ruled city in more than five months.
The Chinese foreign ministry said that stopping the violence is the most important thing and that the United States, United Kingdom and other countries should not interfere.
The dollar was boosted last week when comments from the Chinese trade ministry were interpreted as a sign of progress on rolling back China-U.S. tariffs, causing traders to dump safe-haven currencies like the yen.
However, uncertainty hit again on Friday when Trump said that he had not agreed to reduce tariffs.
Source: Reuters (By Elizabeth Howcroft)