· The dollar posted modest gains on Wednesday, as traders looked ahead to a possible outcome to drawn out U.S.-China trade talks, while a forecast for monetary policy easing knocked the Aussie.
Against the yen, the dollar traded at 109.12 yen, off a two-week high of 109.205 hit on Tuesday. The greenback had found support on signs Washington and Beijing were moving closer to signing a deal to end their 16-month trade spat.
The U.S. currency rose slightly against the euro and British pound, last fetching $1.1012 per euro and $1.2853 per pound — both levels little changed this week.
The Australian dollar fell 0.2% to $0.6774. Trade is slowing ahead of the Thanksgiving holiday on Thursday in the U.S.
China’s yuan was steady, since the weakness also strengthens the case for deeper monetary easing. It last traded at 7.0291 per greenback.
· The greenback, measured by the US Dollar Index (DXY), is extending the gradual upside and flirts at the same time with 2-week highs in the 98.40 region.
In the US data space, another estimate of the Q3 GDP is due seconded by inflation figures gauged by the PCE, usual weekly Claims, the Chicago PMI, Durable Goods Orders, Personal Income/Spending and Pending Home Sales.
At the moment, the pair is gaining 0.11% at 98.36 and a breakout of 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1). On the downside, immediate contention is located at 98.08 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.58 (200-day SMA).
· U.S. President Donald Trump said overnight that Washington was in the “final throes” of work on a deal to defuse the trade war, after top negotiators from the two countries spoke by telephone on Tuesday.
· If both sides cannot reach an agreement soon, the next important date to watch is Dec. 15, when Washington is scheduled to impose even more tariffs on Chinese goods.
· The U.S. goods trade deficit fell sharply in October as both exports and imports declined, pointing to a continued reduction in trade flows that has been blamed on the Trump administration’ “America First” policy.
The Commerce Department said on Tuesday the goods trade gap dropped 5.7% percent to $66.5 billion last month.
Exports fell 0.7% after decreasing 1.3% in September. Exports were depressed by a drop in shipments of foods and feeds, likely soybeans. Automobile exports also declined and were probably weighed down by a 40-day strike at General Motors (GM.N), which undercut motor vehicle production.
There were also decreases in exports of capital and consumer goods. Exports of industrial supplies, however, rose.
Goods imports tumbled 2.4% in October after falling 2.1% in the prior month, amid decreases in imports of industrial supplies, motor vehicles and consumer goods. Imports of capital goods rebounded modestly.
The shrinking trade gap is positive for the calculation of gross domestic product and suggests trade could support the economy in the fourth quarter as growth slows amid cooling consumer spending and persistent weakness in business investment.
· Oil slipped on Wednesday after an industry report showed a surprise build-up in U.S. crude inventories, but optimism surrounding the signing of the first phase of a U.S.-China trade deal prevented a bigger slide in prices.
Brent crude futures LCOc1 dropped 9 cents, or 0.14%, to $64.18 a barrel by 0725 GMT, while West Texas Intermediate (WTI) crude futures CLc1 fell 12 cents, or 0.21%, to $58.29 per barrel.
Reference: Reuters, CNBC, FX Street
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