The dollar was mixed in ranges close Monday, traders are having a hard time to unravel the latest developments of the trade conflict between the United States and China, while the british pound remained under the pressure of the political rhetoric of the british conservative party in power before its annual conference.
Over the weekend, Bloomberg had reported that sources in the Treasury have denied in part and qualified the assertion that the United States is considering a package of measures to restrict american investment in chinese companies.
The timing of the reports, which have affected the yuan and the currencies which are linked to it, which contrasted sharply with the “goodwill gesture” to president Donald Trump suspending some tariffs americans while China celebrated the 70th anniversary of the takeover of the Communist Party this week.
The holiday is coming in China has kept the yuan in ranges close Monday. At 10: 50am, the rate was 7,1314 dollars, registering a decline of a little more than 0.1%. A slight upward revision of the index Caixin of purchasing managers in the manufacturing sector has strengthened.
The euro has not managed to break a series of weak economic data early in the week, the retail sales growth in Germany slowed to 3.2% year-on-year, compared to 5.2% in July.
At 10: 50 am, the euro was hovering at 1,0934 USD, down less than 0.1% compared to Friday’s close.
The analysts of Nordea forecast that the dollar will remain well supported in the short term, because it is “the shirt to the cleaner of washing,” – the only major currency still backed up by a decent growth of gross domestic product. However, they note that the Treasury has increased the size of its open market operations last week to cope with the pressures on funding markets in the short term, and suggests that the Fed increases its balance sheet by 250 billion dollars.
“Such a decision would be good news for risk sentiment and bad news for the dollar”, wrote analyst Andreas Steno Larsen and Martin Enlund in a note.
The pound sterling has not reacted to an article published last weekend in the Times of London by the chancellor, Philip Hammond, saying that the Prime minister Boris Johnson was surrounded by donors, who could earn billions of dollars in the case of a Hard Brexit by selling the book.
According to data from the CFTC, short positions net on the book have reached their lowest level since July last week, but remain at historically high levels.