US dollar climbs, trade talks in focus
Investing.com – The dollar climbed, and Asian currencies moved sideways on Tuesday morning in Asia after US President Donald Trump moved announced plans to reinstate steel and aluminum tariffs on Brazil and Argentina.
The announcement followed the release Monday in the US of new data from the Institute of Supply Management (ISM) which noted that manufacturing activity there contracted in November. The ISM Manufacturing Purchasing Managers’ Index fell to 48.1 in November, below expectations. A reading under 50 suggests contraction. The US dollar gained some ground on morning trade in Asia. The US Dollar Index, which tracks the greenback against a basket of currencies, was up 0.07% to 97.92 by 8:50 PM ET (01:50 GMT).
US-China trade talks remained a focus for traders with uncertainty remaining after Trump said on Monday that the signing last week of two pieces of legislation in the US that support protesters in Hong Kong would not make negotiations easier, but that China still wants a deal.
Over the weekend, Global Times, a nationalist English-language tabloid in China, tweeted that a phase one trade deal would require that the US roll back tariffs. The next batch of American tariffs on Chinese goods are due to take effect on Dec. 15.
In mainland China, The People’s Bank of China (PBOC) set the reference rate for the yuan, the midpoint around which the currency is allowed to trade, at 7.0223, slightly weaker than the 7.0409 on Monday.
The GBP/USD pair was down 0.03% to 1.2933 as the UK moves closer to an election on December 12. The results of the election could lend some clarity to the future of Brexit.
The EUR/USD was down 0.05% to 1.1072.
The USD/JPY pair gained in morning trading and was up 0.07% to 109.04.
The AUD/USD pair was flat at 0.6817 while the NZD/USD was marginally down, dropping 0.02% to 0.6501.