Dollar, Yuan Little Changed Despite Trump’s Comment

The dollar and the yuan were flat on Tuesday even after U.S. President Donald Trump threatened to increase tariffs on $200 billion of Chinese goods.

In an interview with the Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25% from 10% currently.

Trump said it was “highly unlikely” he would accept China’s request to hold off on the increase, planned for Jan. 1. The comments ran counter to recent speculation about a possible deal when Trump meets Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week.

The U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at 96.893.

Traders also awaited a speech by Federal Reserve Chairman Jerome Powell on Wednesday and minutes from the central bank’s meeting to be released the next day, for more hints on how many more times the Fed is likely to raise interest rates.

“Markets are really keen on what Powell has to say given there has already been a sharp adjustment in Fed hike expectations,” said Nick Twidale, chief operating officer, Rakuten Securities.

“We see an acknowledgement of slowing global growth as negative for the dollar.”

Meanwhile, the USD/CNY pair inched up 0.1% to 6.9480 as the People’s Bank of China (PBOC) set the yuan reference rate at 6.9463 vs the previous day’s fix of 6.9453.

The Australian dollar, often considered a barometer for global risk appetite, traded higher with AUD/USD last at 0.7236, up 0.24%.

The safe haven Japanese yen gained 0.11% against the dollar.

The GBP/USD pair slipped 0.12% to 1.2813 as Brexit worries continued to weigh on the currency.

“Parliament will vote on the deal on Dec. 11 so between now and then, sterling will most likely trade in range as the sceptics hold out for a final outcome,” Kathy Lien, managing director of currency strategy, said in a note./investing.com

 

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