FOREX-Dollar firms versus major currencies ahead of Trump impeachment vote, German Ifo survey

Published 18/12/2019, 09:52
© Reuters.  FOREX-Dollar firms versus major currencies ahead of Trump impeachment vote, German Ifo survey
DXY
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* Euro, pound fall versus dollar

* Chinese yuan below 7 vs dollar as US, China trade optimism

wanes

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga

LONDON, Dec 18 (Reuters) - The U.S. dollar strengthened

across the board on Wednesday, rising against a battered euro

ahead of the German Ifo business survey, and versus a pound that

has lost all of its election gains on fears Britain could leave

the EU without a trade deal.

Solid U.S. economic data suggested to investors that the

Federal Reserve might need to be more strongly persuaded of the

case for meaningful interest rate cuts. Industrial production

has rebounded strongly in November, mainly due to the ending of

the General Motors auto workers strike.

Money markets are not pricing in a rate cut anytime soon.

FEDWATCH

"It is a slightly more generalised firmer U.S. dollar. I

don't think this is news or fundamentally driven flows," said

Ray Attrill, head of FX strategy at National Australia Bank.

The U.S. House of Representatives is due to vote on whether

to impeach President Donald Trump later in the day, with the

Senate expected to vote in January, though analysts note that

the support for impeachment has declined slightly.

A dollar index which tracks the greenback against six major

currencies jumped to a six-day high of 97.343 .DXY and was

last up 0.1% at 97.302.

The euro fell 0.2% to $1.1132 EUR=EBS .

U.S. Trade Representative Robert Lighthizer said on Tuesday

that the United States may increase tariffs on European goods as

it seeks to slash its chronic trade deficit with the continent,

reigniting worries of the prospects of the export-driven euro.

Traders will be watching for the German Ifo business survey,

due at 0900 GMT. Current conditions are expected to have

strengthened slightly, and so are the expectations, economists

polled by Reuters forecast.

The British currency was down by 0.3% at $1.3099 GBP=D3

after falling to $1.3074, its weakest since the general election

on Thursday gave the pro-Brexit ruling Conservative Party a

decisive majority in parliament.

The pound extended its slide on rekindled fears of a chaotic

exit from the European Union. Having campaigned to "get Brexit

done," Prime Minister Boris Johnson's government on Tuesday set

the end of 2020 as an immovable deadline. The dollar remained comfortable above 7 versus the Chinese

yuan, with the yuan last trading flat at 7.0016 in the offshore

market CNH=EBS , as the United States and China are finalising

a "phase one" trade deal, though worries remain over their

future relationship.

"The enthusiasm to the phase one trade deal announced last

week appears to be fading," said Charlie Lay, an analyst at

Commerzbank, adding that "the market's ambivalence is

understandable given that there are few details."

Elsewhere, the New Zealand dollar and the Swedish crown

fell to a one-week low of 0.6555 against the dollar NZD=D3 and

of 10.4960 against the euro EURSEK=D3 respectively.

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