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Dollar ticks up on stalled stimulus talk; yuan falls after PBOC move By Reuters

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© Reuters. FILE PHOTO: Chinese Yuan and U.S. dollar banknotes are seen in this illustration

By Hideyuki Sano

TOKYO (Reuters) – The dollar inched up in early Monday trade as riskier currencies slipped after negotiation on a U.S. stimulus package ran into resistance and as the yuan dropped after China’s central bank took a measure seen as aimed at curbing its strength.

The euro slipped 0.15% to $1.1818 () while the Australian dollar shed 0.25% to $0.7223 .

The yen was little changed at 105.65 to the dollar .

The edged up to 93.104 (), bouncing back from Friday’s near-three-week low of 92.997. The index saw its biggest loss in six weeks on Friday on hopes that a deal for new U.S. stimulus would be reached.

President Donald Trump on Friday offered a $1.8 trillion coronavirus relief package in talks with House Speaker Nancy Pelosi – moving closer to Pelosi’s $2.2 trillion proposal.

But Trump’s offer drew criticism from several Senate Republicans, many of whom are uneasy about the nation’s growing debt and concerned a deal would cost Republicans support in the upcoming presidential election, denting the risk-on mood.

Still, with Nov. 3 election only weeks away, investors bet that Democrat Joe Biden is more likely to win the U.S. presidency and offer a larger economic package.

“On the whole, the big picture has not changed that much,” said Kyosuke Suzuki, director of forex at Societe Generale (OTC:).

FORWARD THINKING

The offshore dropped after the People’s Bank of China (PBOC) said it will lower the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading.

Analysts said the measure could keep the yuan’s strength in check by encouraging the use of forwards.

“The authorities have not stood in the way of yuan strength, but this move could be seen as a sign that they want to slow the pace of appreciation,” wrote Khoon Goh, head of Asia Research at ANZ in Singapore.

“Our interpretation is that removing the reserve requirement is intended to encourage firms to hedge in order to manage currency risk. It also enhances the foreign exchange market structure by making it easier for foreign investors to hedge their onshore portfolio investments.”

The yuan hit a 17-month high on Friday, both in onshore and offshore trade, having gained more than 6% against the dollar since late May largely driven by a favourable yield differential between China and other major economies.

The yuan last traded at 6.7301 per dollar in offshore trade , down 0.6%.

Elsewhere, sterling traded at $1.3035 , having reached a one-month high of $1.3050 on Friday on guarded optimism about Brexit negotiations ahead of a European Union summit this week.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Pound Holds Steady on Brexit Deal Optimism By Investing.com

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© Reuters.

By Yasin Ebrahim

Investing.com – The pound held steady against the dollar on Monday, shrugging off renewed demand for the safe-haven greenback on expectations the U.K. and EU will eventually reach a Brexit deal after both sides agreed to push out the deadline to reach a consensus. 

fell 0.13% to $1.3024.

Brexit talks, which resumed last Thursday, were extended to Wednesday, when EU Brexit negotiator Michel Barnier is expected to attempt to bridge some of the divide between the U.K. and EU.

Ahead of the talks, Barnier’s effort to clinch a deal could receive a boost on hopes German Chancellor Angela Merkel may be able persuade French President Emmanuel Macron to ease his stance on the key sticking point of fishing rights.

Britain has stressed that it prefers to take control over access to its waters, when the Brexit transition period ends. Macron, however, fears that a softer stance on fisheries could see French fishermen sacrificed.

The optimism on progress this week had been tempered somewhat following reports the U.K. is waiting until after the U.S. election to reveal its negotiation strategy as a Joe Biden victory could weaken Britain’s negotiation stance. Biden had previously stressed that a U.K.-U.S. deal would depend on Britain securing a deal with the EU.

British Prime Minister Boris Johnson, however, said Brexit and the U.S. election result were “entirely separate,” according to U.K. media reports.  

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Markets Week Ahead: Dow Jones, US Dollar, Stimulus, GBP, Brexit, EUR, ECB, JPY, BoJ

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Global market sentiment remains fragile heading into a busy week. The Dow Jones and US Dollar eye ongoing fiscal stimulus talks as the election nears. GBP/USD remains glued on Brexit negotiations. …



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XAUUSD Coils Ahead of Next Big Break

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Gold Price Forecast Talking Points:

  • Gold prices remain in a falling wedge pattern that’s been building for more than two months.
  • Ahead of this recent digestion, Gold prices were breaking out with aggression, setting a fresh all-time-high in early-August. Are bulls waiting to drive that next break?
  • The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section.

Last week saw Gold prices tease a bullish breakout. But, buyers stepped back before a re-test of the prior October high and, so far, Gold prices have continued in the digestion backdrop that’s become commonplace over the past two months.

As looked at last week, Gold prices remain in a falling wedge pattern after the bullish breakout drove through the August open. This isn’t the first time that Gold prices have formed a falling wedge during this recent bullish cycle, as similar scenarios presented itself in Feb-May of last year and then again from September-December. Such formations will often be approached with the aim of bullish breakouts, begging the question as to whether or when buyers might be ready to resume the bigger picture trend in the yellow metal.

Gold Forecast

Gold Forecast

Recommended by James Stanley

Download our fresh Q4 Gold Forecast

To learn more about falling wedges, check out our DailyFX Education section.

Gold Daily Price Chart

Gold Daily Price Chart

Chart prepared by James Stanley; Gold on Tradingview

Gold – Deeper Support Potential

On a shorter-term basis, there could be scope for a deeper pullback while that longer-term wedge remains in-play. Price action in Gold appears to be slipping below the bottom-side of the 1900-1920 zone, and underneath price action is another area of possible support running from 1859-1871. This zone is what helped to catch the low in early-August, and came back into play in late-September. Prices in Gold could dip down to this zone while still remaining above the September swing-low; setting the stage for another run at resistances of 1900, 1920 and eventually 1933 (the October swing-high).

Top Trading Opportunities in 2020

Top Trading Opportunities in 2020

Recommended by James Stanley

Get Your Free Top Trading Opportunities Forecast

Gold Four-Hour Price Chart

Gold Four Hour Price Chart

Chart prepared by James Stanley; Gold on Tradingview

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX





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