Dollar drowns as US-China initial trade deal unfolds discontent

by   |  VIEW 301

Dollar drowns as US-China initial trade deal unfolds discontent

On Thursday, the 16th of January 2020, the American currency pared some losses in the morning Asia-Pacific trading after the President of United States Donald Trump alongside Chinese Vice-Premiere Liu He had signed off the initial trade accord late on Wednesday (January 15th), but the US Dollar still remained vulnerable to further downward movements as both FX and equity markets had been waiting for the details of the “Phase One” trade deal which analyst said could unfurl further discontent.

Aside from that, the talking point of the “Phase One” US-China trade agreement had still been Beijing’s pledge to purchase $200 billion worth of US farm goods, which already dragged down US farm goods futures’ prices in the US Commodity market, but the deal would still leave $250 billion worth of Chinese goods exposed to 25% US tariffs, while US President Donald Trump’s earlier remarks that a “Phase Two” trade deal would not be signed off before the November US Presidential Election had been sending a slew of contentious signals to the global FX markets.

Aside from that, during preparation of the report, January 16th, GMT. 04.00, euro was 0.22 per cent against the US dollar to $1.1149, while the British currency remained flat against the US Dollar after reversing earlier losses following reveal of inflation indicators showing UK inflation rose at its slowest pace in three years on December 2019.

On top of that, as the safe-haven Swiss Franc rose 0.4 per cent to $0.9641 against the American dollar, reaching its strongest level against the greenback in more than 12 months and breaking off the pair’s critical resistance level on a 200-day moving average, an FX strategist at UBS in New York, Vassili Serebriakov said earlier on Thursday (January 16th), “....directionally the market expected some weakness, but probably the magnitude surprised. ”