FOREX-Dollar steadies after 3 days of losses as trade deal hopes dim

Published 19/11/2019, 09:22
© Reuters.  FOREX-Dollar steadies after 3 days of losses as trade deal hopes dim
DXY
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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee

LONDON, Nov 19 (Reuters) - The dollar stabilised against a

broad basket of other currencies on Tuesday after three

consecutive days of losses as investors waited for the release

of the minutes of the U.S. central bank meeting at end-October

when policymakers had cut interest rates.

Global macro hedge funds had ramped up their dollar selling

for a third week according to latest weekly positioning data and

some market watchers say hawkish policy minutes could trigger a

dollar rebound.

The greenback has hit a trough since late last week as

hopes for a preliminary trade deal between the United States and

China evaporated.

Expectations had grown that Washington and Beijing would

sign a so-called "phase one" deal this month to scale back their

16-month-long trade war but those hopes received a setback on

Monday after CNBC reported China is pessimistic about agreeing

to a deal, which suggests a resolution to perhaps the biggest

risk to the global economy remains elusive. "Trade headlines is dominating sentiment but in terms of the

key event risk, the release of the Fed minutes will be a big one

for market participants," said Morten Lund, a senior FX

strategist at Nordea.

Against a basket of its rivals .DXY , the greenback was

broadly steady at 97.84 after weakening more than 0.6% in the

last three sessions. It had hit a one-month high of 98.45 on

Nov. 13.

Elsewhere in the currency market, the Australian dollar

AUD=D3 fell 0.16% to $0.6799 and declined 0.26% to 73.82 yen

AUDJPY= .

Australia's central bank "agreed a case could be made" for

another cut in the 0.75% cash rate at its November meeting given

unwelcome weakness in wages growth and inflation, minutes

published on Tuesday showed.

Sterling held firm around $1.2950 with the pound buoyed by

polls pointing to a victory by the ruling Conservatives in

upcoming elections.

In the onshore market, the yuan CNY=CFXS fell to a

two-week low of 7.0295 per dollar.

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