Phase One Looms Over the Dollar | MyForexNews

The American dollar index went up 0.1% at 97.95 when US President Trump threatened higher tariffs on China once again. The Phase One deal boosted USD above CNY for several sessions for optimism over Phase One progress.

In today’s session, the greenback rose against the yuan by 0.13% at ¥7.0356. However, after its four-day decline, USD went up against EUR by 0.1% at $1.1063.

Currency strategists like Piotr Matys in Rabobank see “risk aversion.” He said the recently passed bill in support of Hong Kong could delay the deal’s finalization.

Chief currency strategist at RBC Capital Markets, Adam Cole, said Phase One might reach the end of the year.

The scheduled signing in Chile was canceled amid a national crisis involving metro costs increase, wage decrease, and real estate inflation. The USD/CLP pair jumped by 0.12% at CLP787.51.

Meanwhile, the Canadian dollar fell to its lowest against the US Dollar at $1.3306. The Bank of Canada showed signs of a possible upcoming rate cut.

The President Threatens Again

Trump said if the US and China could not make a trade deal, he would raise tariffs against its opponent. Despite their agreement to cancel existing tariffs earlier this quarter, Trump denied the action. 

China’s Commerce Ministry claims tariffs should be canceled to end the trade war.

Chinese Vice Premier Liu He said he had a meeting with US Trade Representative Robert Lighthizer and Secretary Steven Mnuchin. They claimed to have “constructive discussions” and maintained contact.

Both countries still refuse to give full details before publishing their Phase One deal they agreed upon in October. However, White House Economic Advisor Larry Kudlow claimed they were “getting close.” 

Investors waved off the threat and continued to invest.

Meanwhile, Beijing is hesitant to specify its US agricultural purchase cost. The President claimed Beijing agreed on a $50 million purchase last month.