Dollar Weakens As U.S. Tariff Deadline Approaches
10 December 2019 - 7:03PM
RTTF2
The U.S. dollar depreciated against its major counterparts in
the European session on Tuesday, as a U.S. tariff deadline on
Chinese imports neared amid lack of clarity on trade deal.
Washington is set to impose new tariff hikes on $160 billion of
Chinese goods on December 15, if the two sides fail to reach an
accord.
China's assistant minister of commerce Ren Hongbin said Beijing
is hoping negotiations can conclude on a trade deal before the new
tariffs kick in this weekend.
Markets also await meetings by the Federal Reserve and the
European Central Bank as well as the outcome of Britain's snap
election Thursday for directional cues.
A two-day meeting of the Federal Reserve ends on Wednesday, with
economists expecting no change in economic forecasts and the
interest rate outlook.
The greenback held steady against its major counterparts in the
previous session, except the pound.
The greenback fell to a 4-day low of 1.1085 against the euro,
from a high of 1.1063 seen at 5:00 pm ET. The greenback may
challenge support around the 1.12 mark.
Survey data from the ZEW - Leibniz Centre for European Economic
Research in Mannheim showed that Germany's economic sentiment
strengthened notably to the highest level in 22 months in December
as strong exports and labor market conditions boosted expectations
among financial experts.
The ZEW Indicator of Economic Sentiment rose to 10.7 in December
from -2.1 in November. This was the highest reading since February
2018, when the score was 17.8. The score was also well above the
forecast of 3.5 points.
The greenback declined to 1.3190 against the pound, its lowest
since April 1. If the greenback falls further, it is likely to test
support around the 1.34 region.
Data from the Office for National Statistics showed that the UK
economy stagnated in October as Brexit uncertainties and upcoming
election weighed on most of the sectors.
Gross domestic product remained unchanged in October from
September, when it was down 0.1 percent.
The greenback that closed yesterday's trading at 0.9878 against
the franc dropped to a new 5-week low of 0.9853. The greenback is
seen facing support around the 0.96 mark.
Reversing from an early high of 108.66 against the yen, the
greenback edged down to 108.51. The next possible support for the
greenback is seen around the 106.00 level.
Data from the Bank of Japan showed that Japan M2 money stock
rose 2.8 percent on year in November - coming in at 1,038.4
trillion yen.
That's up from the downwardly revised 2.4 percent in
October.
In contrast, the greenback appreciated to an 8-day high of
0.6811 against the aussie. The greenback is seen finding resistance
around the 0.67 level.
Survey data from National Australia Bank showed that Australia's
business confidence declined in November, unwinding the increase
seen in previous month, while business conditions remained
unchanged.
The business confidence index dropped two points to zero in
November suggesting that on average firms see no change in business
conditions going forward.
The greenback rose to 1.3245 against the loonie, from its early
low of 1.3224. Next key resistance for the greenback is possibly
found around the 1.35 level.
The greenback hovered at a 5-day high of 1.6540 against the
kiwi, from a 4-day low of 1.6568 seen at 9:15 pm ET. The greenback
is poised to test resistance around the 1.63 level.
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