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Dollar in Demand; Turkish Central Bank in Focus

By Ritu

Capital Sands

The dollar nursed losses on Tuesday as receding hopes for a preliminary trade deal between the United States and China hurt demand for the greenback.

The yuan also suffered, touching a two-week low versus the greenback amid doubts about efforts to resolve the U.S.-China trade war.

The Australian dollar fell after minutes from a Reserve Bank of Australia policy meeting showed central bankers considered cutting rates this month.

There have been high expectations that the United States and China would sign a so-called “phase one” deal this month to scale back their 16-month-long trade war.

But the dollar took a hit on Monday after CNBC reported China is pessimistic about agreeing to a deal, which suggests a resolution to perhaps the biggest risk to the global economy remains elusive.

“The dollar tried to break above 109 yen, but it couldn’t because of worries about the trade deal,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.

“The Treasury market is starting to reflect similar concerns about the lack of a trade deal,” Ishikawa added. “This will keep dollar/yen in a narrow range.”

The dollar was a shade lower at 108.62 yen, following a 0.09% decline on Monday.

The dollar was quoted at $1.1074 per euro  on Tuesday in Asia after falling to the lowest in almost two weeks.

Against sterling , the dollar stood at $1.2956, close to a one-month low. The pound has been buoyed by polls pointing to a victory by the ruling Conservatives in upcoming elections.

The dollar index (DXY) against six major currencies was little changed at 97.808, close to a two-week low.

In the onshore market, the yuan fell to a two-week low of 7.0295 per dollar.

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