Yuan and Aussie off four-month high, sterling ticks up
By Hideyuki Sano TOKYO (Reuters) - The Chinese yuan and the Australian dollar hovered below four-month highs touched last week in early Monday trade as investors pored over the U.S.-China trade deal, while sterling stayed strong after a decisive UK general election. Washington and Beijing cooled their trade war last week, reducing some U.S.
By Hideyuki Sano
TOKYO (Reuters) - The Chinese yuan and the Australian dollar hovered below four-month highs touched last week in early Monday trade as investors pored over the U.S.-China trade deal, while sterling stayed strong after a decisive UK general election.
Washington and Beijing cooled their trade war last week, reducing some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods.
The last-minute agreement that averted additional tariffs on Chinese goods totalling $160 billion had lifted the yuan and the Australian dollar and had pushed down the safe-haven yen and the dollar last week, before profit-taking set in.
"It is not that markets are unhappy with the agreement but we will inevitably see some position adjustments as we approach the year-end holiday period," said Yukio Ishizuki, senior strategist at Daiwa Securities.
The offshore yuan traded at 7.0026 yuan per dollar
The trade-sensitive Australian dollar fetched $0.6876
The euro stood at $1.1126
The dollar traded at 109.40 yen
Some analysts also noted investors may need to read the fine print of the deal, which has yet to be officially signed.
U.S. Trade Representative Robert Lighthizer said on Sunday the deal will nearly double U.S. exports to China over the next two years and is "totally done" despite the need for translation and revisions to its text. A date for senior U.S. and Chinese officials to formally sign the agreement is still being determined, he added.
"We have seen over time more reports about the differences between what U.S. said and what China said about the agreement," said Takafumi Yamawaki, head of fixed income research at JPMorgan Securities in Tokyo. "The U.S. talks about the size of U.S. farm products China will buy but China stayed mum."
Many traders were also sceptical whether there will be any another deal after the latest one, which the Trump administration has called "phase one", given the fundamental differences over key issues such as intellectual property rights.
Elsewhere, sterling gained 0.2% in early Asian trade on Monday to $1.3353
It has risen to $1.3516 on Friday, a high last seen in May last year, after British Prime Minister Boris Johnson won a commanding election victory last week, enabling him to end three years of deadlock over Brexit.
Johnson's government is expected to bring the Withdrawal Agreement Bill back to parliament before Christmas, to allow Britain to exit the European Union by Jan. 31.
(Reporting by Hideyuki Sano. Editing by Lincoln Feast.)
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