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FOREX-Dollar stalls after Trump speech reveals little on trade

Published 12/11/2019, 21:01
Updated 12/11/2019, 21:10
© Reuters.  FOREX-Dollar stalls after Trump speech reveals little on trade
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(New throughout; adds analyst quotes)

By Kate Duguid

Nov 12 (Reuters) - The dollar was little changed after U.S.

President Donald Trump in a speech on Tuesday offered no new

details on the state of the administration's trade war with

China.

The dollar index .DXY held onto modest gains made earlier

on Tuesday, but was last trading at 98.310 against a basket of

six currencies, up 0.11% on the day, and a hair above 98.304,

its level at noon when Trump's remarks began.

Speaking at The Economic Club of New York, Trump instead

took aim once again at the Federal Reserve, bemoaning the fact

that the United States has higher interest rates than other

developed economies.

"Give me some of that. Give me some of that money. I want

some of that money. Our Federal Reserve doesn't let us do it."

The speech was highly anticipated by the foreign exchange

market, which has moved with trade headlines. The paucity of

details on trade in itself was seen by some as a pessimistic

signal.

"I don't think we've learned anything new from Trump's

speech. The only thing that's maybe new is that he did not

announce a date and a time for a signing ceremony. Where markets

had been hoping for that, those hopes were dashed," said Greg

Anderson, global head of foreign exchange strategy at BMO

Capital Markets.

"We had a little bit of a fade in risky assets when he

started talking and it was confirmed that he was not about to

announce phase one."

The S&P 500 index .SPX fell as Trump spoke, though

remained positive on the day. The Dow .DJI and Nasdaq .IXIC

indexes had also fallen. Some of that risk-off sentiment was

seen boosting safe-haven assets modestly. The dollar was 0.08%

weaker against the Japanese yen JPY= and 0.09% lower versus

the Swiss franc CHF= .

The dollar was lifted 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. The offshore Chinese yuan was weaker against the dollar at

7.018, down 0.17%. The threshold of 7 yuan per dollar was

crossed for the first time in August CNH= . The yuan had also

weakened earlier Tuesday on political unrest in Hong Kong and

after weak economic data in mainland China.

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