The US dollar weakened this morning on trade optimism after strong gains yesterday on safe-haven buying
Peter Compton " | November 21, 2019
FX markets are awaiting news on the US/China trade discussions and specifically on Trump's support for Hong Kong protesters. China has threatened retaliation for US support of violent, pro-democracy protests. The dollar is weaker today after Chinese Vice Premier and top trade negotiator, Liu He, expressed cautious optimism about reaching a phase-1 trade deal with the US.
November 21, 2019
EUR/USD 1.1079 GBP/USD 1.2956 USD/CAD 1.3322 AUD/USD 0.6803 USD/JPY 108.58 USD/CNH 7.0352 USD/ILS 3.4563 USD/MXN 19.4951 USD/CHF 0.992 USD/INR 71.7650
USD is weaker today after China’s Liu He said he remained “cautiously optimistic” of reaching a phase-one trade deal. On Capitol Hill, The US House and Senate passed bills showing support for protesters in Hong Kong. Trump is expected to sign the legislation as early as today. Reviewing yesterday’s release of Fed minutes, policymakers stressed that threats to the US economy remained tilted to the downside, though they are expected to put rates on hold after three interest rate cuts this year.GBP
The pound is stronger today after the Labour party’s head delivered a speech for economic stimulus, should they win the December 12 election. The plan leans heavily on nationalization of industry and taxing the rich. Markets seem to believe the Conservative party will win the election - as polls indicate - providing a clearer path for the UK’s economy and a soft Brexit in particular.EUR
The euro is stronger this morning as some banks, brokerages, and FX traders have begun to turn bullish on the euro’s prospects in 2020. Although interest rates in euroland are negative, economists believe the governments of richer countries like Germany and the Netherlands can increase government spending, thus adding fiscal stimulus.CAD
The Canadian dollar strengthened some this morning after a significantly weak day yesterday. The price of oil is up this morning, but the C-dollar is stronger mostly on overall USD weakness. Central bank head Poloz is speaking later today with FX traders awaiting his comments.ASIA/PACIFIC
The Indian rupee strengthened slightly overnight as the government announced additional sales of stakes in companies in which the federal government of India owns large portions. India’s budget has benefited for years from these sales.
The Japanese yen strengthened against the greenback while the New Zealand and Australian dollars both gained on optimism around US/China trade agreements.