Sun, Oct 14, 2018 - Page 14 News List

Dollar gains on stock bounce and upbeat China data

Reuters, NEW YORK

The US dollar on Friday climbed against a basket of currencies as global equity prices rebounded from this week’s rout and robust Chinese export figures soothed worries about the world’s second-biggest economy and its trade war with Washington.

The euro and sterling snapped their three-day winning streak in advance of next week’s EU summit where Britain and the EU could strike a Brexit deal.

China’s exports jumped 14.5 percent last month from a year earlier, the biggest year-on-year increase in seven months, marking a record trade surplus with the US.

The data suggested that the tariffs US President Donald Trump has slapped on Beijing have yet to bite.

“The market breathed a sigh of relief with the Chinese trade numbers despite the tit-for-tat trade war with the US,” said Dean Popplewell, vice president of market analysis at Oanda in Toronto.

“People were happy to put on some risk,” he said.

A weaker yuan likely mitigated the sting from US duties on US$250 billion worth of Chinese-made goods, analysts said.

US Secretary of the Treasury Steven Mnuchin said that he told China’s central bank chief that currency issues need to be part of any further US-China trade talks.

An index that tracks the US dollar versus six major currencies was up 0.23 percent at 95.234, reducing its weekly loss to 0.4 percent.

The US dollar index touched a seven-week high of 96.15 on Tuesday as the US 10-year Treasury yield hit a seven-year peak due to worries about rising inflation and US government debt supply.

“The underlying sentiment remains positive for the buck, but vulnerabilities, as this week exposed, remained, particularly on the political front ahead of US midterm elections next month,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

The euro and pound retreated from two-week and three-week peaks, respectively, versus the greenback after EU Chief Negotiator Michel Barnier on Wednesday said that an agreement for Britain to leave the EU could be reached next week.

The single currency was down 0.27 percent at US$1.1562, while the sterling was 0.59 percent lower at US$1.3157.

The common currency also fell after European Central Bank President Mario Draghi toned down his outlook for a rise in underlying inflation from “relatively vigorous” to “gradual.”

The Chinese yuan fell 0.65 percent to 6.9227 per US dollar in offshore trading, as the latest Chinese export figures stoked concerns they would ratchet up trade tension between China and the United States.

In Taipei, the New Taiwan dollar rose against the US dollar for the first time in nine trading sessions, gaining NT$0.195 to close at NT$30.910.

The local currency was down 0.23 percent from last week’s NT$30.840.

Additional reporting by CNA

This story has been viewed 1547 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top