The U.S. dollar remained broadly supported on Tuesday after U.S. Treasury Secretary Steven Mnuchin confirmed U.S.-China trade talks will resume next month, but concerns about slowing global growth continued to weigh on market sentiment.
Against a basket of currencies, the dollar is near 98.28 by 2:37 AM ET (6:37GMT).
“The U.S. dollar is rising by default rather than anything U.S.-specific,”
said Michael McCarthy, chief market strategist at CMC Markets in Sydney,
adding that volumes were low as traders mostly kept to the sidelines waiting for news.
“Trade is never far from the markets’ radar,
but I think currency markets are increasingly expecting (U.S-China tensions) to be protracted,
I think the optimism has dissipated.”
The U.S. dollar was little changed against the yen at 107.53, while the euro was trading at 1.0992, not far from a 28-month low of 1.0926 touched earlier this month.
The single currency fell 0.2% on Monday after data showing that a German manufacturing recession deepened unexpectedly in September and growth in the service sector lost momentum, adding to worries over the outlook for the wider Eurozone.
The British pound was hovering near one-week lows at 1.2435 ahead of a U.K. Supreme Court ruling on whether Prime Minister Boris Johnson acted unlawfully when he suspended parliament just weeks before Brexit.
Moreover, The outcome of the case could have implications for Johnson’s plans to pull the U.K. out of the European Union on Oct. 31.
The Australian and New Zealand dollars were steady ahead of a speech by Reserve Bank of Australia Governor Phil Lowe, with the market expecting a dovish tone after weak jobs data last week underlined expectations for a rate cut.
Both currencies sat near three-week lows, with the Aussie at 0.6774 and the kiwi at 0.6295.
“We think Lowe will provide a strong signal that the RBA is ready to cut rates again,
endorsing our view for a 25bp cut in October,”
said Tapas Strickland, a director of economics and markets at National Australia Bank in Sydney.
“Any comments on the scope for an unconventional policy will also be critical for the market.”
According to investing
- Join our channel on Telegram here to be up to date with everything about Forex trading
- Trade with XTB and get a free stock exchange subscription. Click here to register
- Abe, Trump head for a trade deal; auto tariffs a sticking point