Sun, Dec 08, 2019 - Page 14 News List

US dollar set for worst week since mid-October

Staff writer, with CNA and Reuters

The New Taiwan dollar on Friday remained unchanged against the US dollar, closing at NT$30.500, and mostly flat from NT$30.513 a week earlier.

Turnover totaled US$673 million during the trading session.

The greenback opened at NT$30.510, moving between NT$30.470 and NT$30.520 before the close.

Elsewhere on Friday, the euro was steady against the US dollar, which was headed for its worst week since mid-October due to concern over US-China trade relations and hints of weakness in the US economy.

The New Zealand dollar rebounded amid renewed risk appetite and encouraging domestic factors.

Against a basket of six currencies, the US dollar fell to a one-month low of 97.355, but was last flat at 97.424. The euro was little changed at US$1.1102.

Sterling was 0.2 percent weaker at US$1.3129 and down 0.1 percent against the euro at £0.8449, but close to a two-and-a-half-year high as traders grew more confident uncertainty over Brexit would end soon.

US President Donald Trump said US-China trade talks were “moving right along” and that “we’ll have to see” about an increase in tariffs scheduled for Sunday next week.

“The US market is concerned about the Dec. 15 tariffs being enacted, but I don’t think this is going to happen before the end of the year,” Boston Private chief investment officer Shannon Saccocia said, adding that she has not made any investment decisions that implied the tariffs would be implemented.

However, markets were unconvinced, with worries stemming from a lack of similar enthusiasm from China, keeping the US dollar subdued.

Chinese officials reiterated that some US tariffs must be rolled back for a deal to end the 17-month trade war, something Washington has given no sign of doing.

Risk sentiment recovered, pushing the New Zealand dollar to a four-month high of US$0.6569.

“My guess — and it’s just a guess — is that the rally in NZD may have started with a recovery in risk sentiment” driven by Trump’s comments, ACLS Global strategist Marshall Gittler said.

The New Zealand dollar also got a boost from Reserve Bank of New Zealand Deputy Governor Geoff Bascand saying in a Bloomberg interview that economic developments are “supportive of the story that we’re near or around that turning point” in the economic cycle, Gittler said.

US nonfarm payrolls data due later in the day come after dismal numbers showed weak private payrolls, soft services activity and a shrinking manufacturing sector.

A Reuters poll showed a forecast of 180,000 jobs being added in the US last month. Anything short of that might leave the US Federal Reserve reconsidering its wait-and-see mode when it meets on Tuesday and Wednesday.

“There is a greater potential for an exaggerated move if we see a big divergence from expectations,” CMC Markets chief market strategist Michael McCarthy said in Sydney. “The risk is in both directions ... below 150,000 or above 210,000, we could see a significant market reaction.”

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