Dollar down on trade war reprieve; pound soars on win by UK PM Johnson

By Saqib Iqbal Ahmed NEW YORK (Reuters) - The dollar slipped against a basket of currencies on Friday as the announcement of an initial China-U.S. trade deal and an election victory for Britain's Brexit-backing Conservative Party appeared to clear the fog on the global investment horizon, sapping safe-haven demand for the greenback. U.S

Reuters December 14, 2019 00:08:07 IST
Dollar down on trade war reprieve; pound soars on win by UK PM Johnson

Dollar down on trade war reprieve pound soars on win by UK PM Johnson

By Saqib Iqbal Ahmed

NEW YORK (Reuters) - The dollar slipped against a basket of currencies on Friday as the announcement of an initial China-U.S. trade deal and an election victory for Britain's Brexit-backing Conservative Party appeared to clear the fog on the global investment horizon, sapping safe-haven demand for the greenback.

U.S. President Donald Trump and Chinese officials said Friday that they have agreed to a "phase one" trade deal that included cutting American tariffs on Chinese goods.

The two countries have reached an agreement where Washington would suspend tariffs on Chinese imports scheduled for Sunday, while Beijing would step up purchases of U.S. agricultural products.

But they offered no specific details on the amount of U.S. agricultural goods Beijing had agreed to buy, a key sticking point of the lengthy deal negotiations.

The deal could dial down tensions between the United States and China, providing some relief to investors who have been buffeted for months by worries that a full-blown trade war would pressure global economic growth.

"The market was flooded with many headlines this morning and some were contradictory, but overall we believed this weekend's tariffs would probably be delayed or canceled, so the end result is not too surprising," said John Doyle, vice president for dealing and trading at Tempus Inc in Washington.

Lack of details on Beijing's purchase of U.S. agricultural left investors hesitant to jump wholeheartedly into riskier currencies, Doyle said.

"That is a huge detail that is missing," he said.

The dollar index <.DXY>, which measures the greenback against six major currencies, was down 0.23% at 97.176, after slipping as low as 96.719.

Appetite for trade-sensitive risky currencies, such as the Australian dollar, remained low. The Aussie was 0.61% lower against the dollar.

"Some have been burned in the past for believing there was true progress, only to be disappointed," Tempus' Doyle said.

Against the Japanese yen - which tends to draw investors during times of geopolitical or financial stress as Japan is the world’s biggest creditor nation - the dollar was about flat on the day.

Although the offshore yuan was initially boosted by trade deal hopes, it was last down about 1% versus the dollar.

Sterling was well supported on Friday as investors rushed to unwind bets on a weaker pound after a resounding election victory for Prime Minister Boris Johnson's Conservative Party.

Johnson's win will allow him to end three years of political paralysis and take Britain out of the European Union in an orderly manner in a matter of weeks.

The pound was up 1.38% at $1.38.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by Elizabeth Howcroft in London; editing by Jonathan Oatis)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.