The dollar remained stable on Thursday against a basket of currencies, with investors continuing to monitor closely the evolution of the trade negotiations between china and the us, while the pound sterling was progressing upward before the policy meeting of the Bank of England.
The dollar index against a basket of six major foreign currencies remained stable at 97,74 at 11: 15 am.
Washington and Beijing must simultaneously cancel some of the existing customs duties on their products in order that the two parties reach a commercial agreement as “first phase”, announced on Thursday the chinese ministry of Commerce. China has indicated that it is prepared to negotiate the amount of tariffs to cancel.
These comments took place after reports that a meeting between the american president Donald Trump and chinese president Xi Jinping for the signing of an interim trade agreement could be postponed to December.
“The dollar is looking for a direction,” said Takuya Kanda, director general of the research department of the research Institute Gaitame.com in Tokyo.
“The main catalyst of purchases in dollars was pending the signature of a trade agreement between the United States and China this month. If this is delayed a month, this is not a big disappointment, but we must see that the chinese government has to say.”
The two parties have imposed customs duties in mutual on their products during a trade war long of 16 months, which is reflected in all the financial markets, has slowed global investment, and growth. The negotiations have been fractional, making an agreement far from certain.
The dollar was little changed versus the yen, to 109,08. The euro was slightly higher against the greenback at 1.1084.
German industrial output fell more than expected in September, according to data released on Thursday, underlining the persistent weakness in the sector and indicating that the largest economy of the euro zone is sinking into recession in the third quarter.
The pound sterling rose 0.15% to 1,2870 dollar, after touching it briefly to its lowest level since October 29. Against the euro, the pound sterling was 0,8612, trading in a narrow range ahead of a meeting of the BoE on Thursday.
No policy change is expected, but investors focused on the response of the BoE to the uncertainties related to the exit of the Uk from the European Union.
Traders are also awaiting the results of parliamentary elections of 12 December, which will determine whether the conservative party in power can obtain a majority in Parliament and conclude the Brexit to the deadline of 31 January.
The updated forecast of the central bank should indicate that the economy is poised to grow in the next two or three years, which would indicate that the BoE thinks that rate hikes will be needed.
–Reuters contributed to this report
