Forex trends Wednesday: Markets may turn risk-off as US-China trade deal may be over-hyped

World currencies

Currencies face uncertainty and a risk-off tone on Wednesday as the much-hyped trade war pause over the weekend appears to have been over-hyped.

U.S. markets will be closed on Wednesday for a day of mourning for the death of former U.S. President George H.W. Bush.

The U.S. trade war had appeared to at least have been put on a partial hiatus after the G-20 meeting in Buenos Aires over the weekend, with U.S. President Trump and Chinese President Xi Jinping initially reported to have agreed to hold off on planned tariff increases for 90 days while trade talks continue.

But signs were emerging that the U.S. side had over-hyped what actually came out of the meeting, with Chinese officials failing to confirm what Trump announced and as Trump launched another of his signature, erratic tweet-storms. Chinese officials reportedly didn’t even confirm there was a 90-day agreement.

Currencies

The U.S. dollar index, which measures the greenback against a basket of currencies, was at 96.96 at 7:05 A.M. SGT after rising to as high as 97.05 in Tuesday’s session, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 2.912 percent at 7:59 A.M. SGT, falling from as high as 2.968 percent in Tuesday’s session, according to Tullett Prebon data.

The euro/dollar was at 1.1337 at 8:47 A.M. SGT after trading in a 1.1317 to 1.1419 range on Tuesday, according to DZHI data.

Support for sterling

The British pound/dollar was at 1.2711 at 8:48 A.M. SGT after trading in a 1.2658 to 1.2840 range on Tuesday, according to DZHI data.

Scotiabank said in a note on Tuesday that sterling got a boost from a European Court of Justice ruling that the U.K. could unilaterally withdraw its Article 50 notice to exit the European Union until a Brexit agreement is formally concluded.

“While this may lessen hard Brexit concerns given a lack of support for the agreement, it may also lessen the hesitation to vote against it,” Scotiabank said.

The dollar/yen was at 112.891 at 8’48 A.M. SGT after trading in a 112.54 to 113.639 range on Tuesday, according to DZHI data.

The dollar/yuan ended Tuesday at 6.8342 after trading in a 6.8307 to 6.8886 range during the session, according to DZHI data.

The dollar/Singapore dollar was at 1.3660 at 8:48 A.M. SGT after trading in a 1.3621 to 1.3677 range on Tuesday, according to DZHI data.

The dollar/Malaysian ringgit was at 4.1560 at 8:35 A.M. SGT after trading in a 4.1424 to 4.1650 range on Tuesday, according to DZHI data.

The dollar/Indonesian rupiah was at 14,285 at Tuesday’s close after trading in a 14,235 to 14,320 range during the session, according to DZHI data.

 

Get the Shenton Wire morning briefing in your inbox





Generic Banners