American dollar soars after reports of end of US-China deadlock

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American dollar soars after reports of end of US-China deadlock

With talks between the United States and China set to be held on 30th-31st January 2019 to break the trade deadlock between the two countries, the American dollar gained for the first time in five weeks on Friday, 18th January.

Earlier on Thursday, 17th January, the Wall Street Journal was reported that US Treasury Secretary Steve Mnuchin was considering making a recommendation to lift tariffs on Chinese imports. Although this report was quashed by the US Treasury as being merely an untrue rumour, it helped the US dollar boost itself, along with the American stock market indices.

The dollar rose by 0.25% against the Euro and was trading at 1.13. Speaking about the reports surrounding Mnuchin's recommendations, according to a Reuters report, Stephen Gallo of London's BMO Capital Markets said, "Yesterday’s (Thursday's) Wall Street Journal headline concerning a possible rollback of the Trump tariffs was a setback for (the US dollar/renminbi (Yuan) cross), and although it was subsequently denied, it had created confusion in the foreign exchange space."

In terms of the American stock market indices, all three major indices – Dow Jones, Nasdaq and S&P – posted trading gains on Friday.