Dollar firms as Sino-U.S. trade deal day draws near
Jan 14 2020
Meanwhile, investors analyzed the U.S.jobs report released Friday. The greenback has surged 2.2 per cent versus the safe-haven Japanese currency since the middle of last week, as fears of a major military confrontation between the United States and Iran gave way to a return to a rush to buy risk assets.
The Trump administration's decision to reverse the label - one that the U.S. imposed only five months ago - comes after the world's two largest economies finally brokered a partial trade deal late previous year after a turbulent fight that roiled financial markets and hurt American farmers and consumers. These discussions had been conducted in previous administrations but had been halted by the Trump administration.
Last month, the U.S. and China agreed to a partial trade deal with Beijing pledging to purchase up to $200bn of American products over the next two years, including agricultural goods from the US's hard-hit farmers. The other fact that makes many economists skeptical is the most US agricultural products China has ever purchased was $26 billion back in 2012.
But while the Phase One accord "stops the bleeding", he said.
"However, the 86 page phase one agreement has not yet been made public".
"Both sides should produce a lot of positive headlines, really talking up the deal and sounding positive about the outlook", said Westpac FX analyst Sean Callow. Mr. Trump believed that China had turned to that practice in August, when it allowed its currency to weaken, in an attempt to blunt the impact of tariffs he imposed on Chinese imports.
"This is the ideal employment report for the Fed to continue to run the economy "hot", as views on the natural rate of unemployment continue to drop", said Alan Ruskin, Deutsche Bank's global head of FX strategy.
The dollar was firm on the yen at 109.62 but faces tough resistance around 109.70 where rallies have repeatedly failed in the past couple of months.
On Sunday, another Bank of England policymaker, Gertjan Vlieghe, said he would vote for a rate cut this month unless economic data improved significantly.
Spot gold slipped 0.48 percent to $1,554.48 per ounce, having hit a seven-year top last week of $1,610.90 at the height of Iran-US tensions.
Brent crude futures were up 5 cents at $65.03 a barrel, while United States crude added 11 cents to $59.15 a barrel.