The US Dollar and Positive German Economic Sentiment

The US Dollar and Positive German Economic Sentiment

Against the significant currencies, Dollar trades weaker.

The survey of German ZEW turns the euro positive.

After a better-than-expected German economic sentiment survey, the euro rose on Tuesday. Doubts limit the moves that the release might change the rhetoric of the Central European Bank.

Versus the safe-haven Japanese yen, the dollar was a bit changed as investors are wary of a U.S. tariffs deadline on China. Upcoming Federal Reserve and ECB meetings, and the British election are a reason to worry as well. The dollar is also weaker against a basket of major currencies.

Senior currency strategist at SEB, Richard Falkenhall, said the message from the ECB most likely will not change. Nevertheless, the Fed will most likely cut rates next year. It means that markets’ focus will remain on the Fed.

Richard Falkenhall also said that when it comes to ECB communication, it’s too early to expect any significant change.

The question is whether Washington will worsen the situation and impose tariffs on Chinse goods on Sunday or not. Another issue is will the phase one agreement conclude before that day.

The Dollar Versus a Basket of Currencies

Dollar vs Major Currencies

Larry Kudlow, White House economic adviser, said on Friday that the deadline for tariffs is still in place. Nevertheless, Sonny Perdue suggested that the tariffs may not be imposed.

After a survey showed that the mood among German investors improved more than forecast in December, the euro rose 0.2% to $1.1082.

The dollar traded against a basket of currencies down 0.1% at 97.513. Versus the Japanese yen greenback was flat at 108.56.

The currency most sensitive to the U.S.-China trade war; the Chinese yuan also traded neutral against the U.S. dollar in the offshore market at 7.0398.

On the market, waiting for trade news soaring inflation in China had little effect.

Macro strategist at Societe Generale, Kit Juckes called market markets “dull.”

These are central events in the market today.

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