On Tuesday, the 12th of February, the American dollar fell against a gauge of global currencies including seven major currencies, putting an end to its longest winning streak in two years, as investors became optimistic and started to put money on riskier assets, instead safe-haven US dollar, over fresh optimism of a jumpstart following US-China trade talk.
At Monday’s market closure (February 11th), the dollar had secured gains for straight eight sessions in a row, its longest rally since February 2017. However, the key US Dollar index, which is used to measure against a basket of seven rivals, was 0.38 percent down on Tuesday’s market closure at 96.69.
A bullish bias casts its spell on global stocks & currencies, including the emerging market currencies, leaving the American Dollar dried out, after US President Donald Trump told on Tuesday (February 12th), that he could extend the March 1 truce deadline by a slight margin, however, the US President also added that he had no wish to meet Chinese President Xi Jinping before rubberstamping a trade deal, that could be beneficial to US firms operating businesses in China.
Although China seemed to be upbeat and aggressive over the first day of trade talk on February the 11th, regarding US navies mission to the South China Sea, analysts are suggesting that a downbeat Chinese economy, alongside a basket of unnerving factory data, would help the United States facilitate a trade deal in their favor.
Citing US as a leveraged site in this recent round of trade talk, a senior foreign exchange trader and strategist at Tempus, Inc., Juan Perez said, “the economy of China is not booming, so it makes sense that they are willing to sit down with the United States. There is leverage on the side of the United States. ”