(Reuters) - The dollar was stronger against the yen and Swiss franc on Tuesday as traders grew optimistic ahead of a speech by U.S. President Donald Trump, during which he is expected to again postpone imposing tariffs on European Union autos.
FILE PHOTO: Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration, January 21, 2016. REUTERS/Jason Lee/Illustration/File Photo
Trump’s speech to the Economic Club of New York is expected to be market-moving as he is scheduled to discuss U.S. trade policy. Currency traders will also be listening for hints about the Trump administration’s long-running trade war with China, and any progress towards the “phase one” trade deal.
“The market has obviously been quite wary about whether a phase one deal is on or not - a lot of hopes are being placed on this speech one way or another,” said Jane Foley, senior forex strategist at Rabobank.
“We just don’t know which way he’s going to go,” she said, as Trump can be “very impulsive” and therefore difficult to predict.
“I suspect that he will provide just enough encouragement to indicate that there is reason to be hopeful, without probably saying that it’s a done deal,” Foley said.
Versus a basket of currencies, the global dollar index .DXY rose 0.1%.
The dollar strengthened against safe haven currencies: it was up 0.2% against both the Japanese yen JPY=EBS and the Swiss franc CHF=EBS in early London trading.
The euro was down by 0.1% against the dollar at $1.10225 EUR=EBS, close to the four-week low of $1.10165 it fell to last week.
The New Zealand dollar was down 0.5% at 0.6335 versus the U.S. dollar, only slightly recovered from the low of $0.6323 it reached last week NZD=D3 after a central bank survey showed the country's near-term inflation expectations dropped, increasing traders' expectations of a rate cut this week.
The offshore Chinese yuan was flat against the dollar at around 7, a threshold it crossed for the first time in August CNH=EBS. The yuan weakened on political unrest in Hong Kong, as well as because of weak economic data in mainland China.
In Hong Kong, riot police fired tear gas at a university campus on Tuesday, a day after a protester was shot and a man set on fire in some of the most dramatic unrest to rock the Chinese-ruled city in more than five months.
The Chinese foreign ministry said that stopping the violence is the most important thing and that the United States, United Kingdom and other countries should not interfere.
The dollar was boosted last week when comments from the Chinese trade ministry were interpreted as a sign of progress on rolling back China-U.S. tariffs, causing traders to dump safe-haven currencies like the yen.
However, uncertainty hit again on Friday when Trump said that he had not agreed to reduce tariffs.
Reporting by Elizabeth Howcroft; Editing by Muralikumar Anantharaman
https://www.reuters.com/article/global-forex/forex-dollar-edges-up-ahead-of-potentially-market-moving-trump-trade-speech-idUSL8N27S2BB
2019-11-12 09:21:00Z
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