Euro is falling with investors to exercise caution about us-China trade negotiations

  • Euro is falling with investors to exercise caution about us-China trade negotiations
    Independent.t. E.
    The Euro fell on Monday as the dollar rose in anticipation of the proposed trade negotiations between the US and China this week that investors hope to ease tensions between the two largest economies in the world.
    https://www.independent.ie/business/world/euro-falls-with-investors-cautious-about-uschina-trade-talks-37232248.html
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The Euro fell on Monday as the dollar rose in anticipation of the proposed trade negotiations between the US and China this week that investors hope to ease tensions between the two largest economies in the world.

It is expected that negotiations between Chinese and American officials in Washington will be held in the coming days, according to media reports. Analysts say that the participants are lower-level officials, although it hopes that negotiations can yield a breakthrough in the months-long trade conflict.

The escalation of trade tensions between the United States and their trading partners, in addition to a plunge in the Turkish Lira, led to the growth of the dollar and the negative impact on emerging market currencies.

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The Euro fell 0.2 PC to $1.1421, but was still above the lows 2018 $1.3010 last week. The Euro dropped to 13-month low early last week on concerns that the Turkish crisis could hurt European banks.

The dollar index rose 0.2 PC 96.248. Traders also awaited the release of Federal reserve meeting the fed at the end of this week and Symposium in Jackson hole on insights into the likely direction of monetary policy.

“Market participants will be willing to hear more details on the interpretation of recent fed’s comment that further gradual increase in rates, corresponding to ‘now’. What do you mean ‘now’ means, and could mean a possible change in leadership?” MUFG analysts said.

“Given our view that the U.S. dollar-the dollar became a bit excessive, a speech on Friday may well be the catalyst for a sharp reversal in the other direction, because long positions in the dollar has somewhat weakened.”

Emerging markets mostly lower, though losses were small.

Turkish Lira broke a three-day rebound on Friday, sliding more than 5pc against the dollar on fears the United States would impose additional economic sanctions if Turkey transferred the detained American pastor Andrew Branson. On Monday, the Lira fell 1.5 PC.

The Chinese offshore yuan was 0.1 PC weaker in 6.8408 per dollar, after rising on Friday at about 0.4 PC, when he pulled further and further away from a 19-month low 6.9585 ground on Wednesday.

Dealers cited speculation that Sino-us trade talks could pave the way for the summit between U.S. President Donald trump and Chinese President XI Jinping in November.

The dollar rose 0.1 PC against the yen to 110.63 yen, after shedding 0.35 PC on Friday.

Kazushige, kayda, head of foreign exchange at state Street Bank in Tokyo said dollar/yen could test the 110 level in the case of unexpected negative results in Chinese-American trade negotiations.

“There will be more incentive to buy the dollar, if the risks recede, but I don’t think the dollar/yen will be easy to break out of it as a result of trade negotiations,” Kaida said.

Elsewhere, the Swiss franc rose 0.2 PC 1.1366 francs per Euro, while sterling fell slightly to $1.2740 against the dollar.

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