The markets lost to Federal Reserve and United States politics. Talks of the United States and China for postponement are welcomed by traders. Nonetheless, uncertainty looms over everything.
The dollar is between the pressures of worries concerning support from rising United States safe-harbor demand and bond yields and the lagging United States economic recovery. Thus, the US dollar began where it left off last week on Monday.
Due to the postponement of the United States-China trade deal review, the resulting uncertainty muted a boost to sentiment. This was ahead of a week that includes Federal Reserve minutes and the Democrats convention, which leaves the deal intact.
The United States dollar traded under gentle pressure, at 93.039 against a basket of currencies on Monday. Thus, it was roughly in the middle of the range it has held after it had hit a two-year low at the end of July.
The Australian dollar is risk-sensitive. It thus inched up to a three-session high of $0.7194. Nonetheless, it remained contained in the channel it has traded in for a week.
The won and the rupiah, and other Asian currencies, edged lower. Meanwhile, because of the last week’s dovish language from the central bank, the kiwi remained flat to $0.6534.
The yen dipped last week, as a jump in United States yields drew Japanese investment to United States Treasuries. It remained steady at 106.54.
The United States and China postponed a Saturday review of the first phase of their trade deal.
Rodrigo Catril is a national Australian Bank senior foreign exchange strategist. He said that this is good news in the sense that it is something they can place on the back burner for now.
Furthermore, he added that other uncertainties are coming up that need to be resolved. He pointed to United States politics as the presidential election looms. Moreover, new virus hot spots in Europe may challenge the perception that the euro is on an uptrend.