Dollar higher in quiet markets on mixed bullish news
The dollar edged higher in quiet markets and on a combination of mildly bullish news – signing of phase 1 of the US-China trade deal, JPMorgan’s record quarterly earnings in Q4, and the Japanese yen trading over 110 per dollar for the first time since last May. Washington’s lifting of the ‘currency manipulator’ label on China had little impact on markets. This morning’s US Core Consumer Price Index of 0.1% was less than expected, which triggered some dollar selling.
January 14, 2020
EUR/USD 1.1115 GBP/USD 1.2991 USD/CAD 1.3070 AUD/USD 0.6905 USD/JPY 110.01 USD/CNH 6.8843 USD/ILS 3.4641 USD/MXN 18.8014 USD/CHF 0.9698 USD/INR 70.8763
The dollar index gained 0.15% on the back of mildly bullish news, and now trades at its highest level in January. Traders await tomorrow’s signing of phase 1 of the US-China trade deal, but then will start to focus on phase 2 - which will be much more challenging to agree upon. Eyes will be on US corporate earnings; the season starts this week.GBP
The pound dropped by 0.2%, its sixth straight day of losses as it is still suffering from yesterday’s dovish comments by a Bank of England official.EUR
The euro fell against the dollar but rose to its highest level against the UK pound since November. Traders are already talking about potential US-EU trade issues when focus on US-China trade wanes.CAD
The loonie is lower by 0.10%, in-line with overall US dollar strength. Oil prices were slightly lower, hitting fresh one-month lows. There are no Canadian economic data releases today that could move markets. Traders await next week’s Bank of Canada meeting where no policy change is expected.ASIA/PACIFIC
Washington dropped the ‘currency manipulator’ label on China, but markets are not reacting since it’s really become simply a political, not a legitimate market-related tool. Interestingly, the Chinese yuan trades near 6.89 per US dollar, nearly the same rate when China was labeled a manipulator last August 5.