Markets lose to US politics and Federal Reserve. China and the United States talks for postponement are welcomed. Nevertheless, uncertainty looms over everything.
The dollar is caught between pressure from worries concerning the lagging U.S. economic recovery and support from rising United States safe-harbor demand and bond yields. Thus, on Monday, the US dollar started where it left off last week.
Uncertainty muted a boost to sentiment from the postponement of the China-United States trade deal review. This leaves the deal intact, ahead of a week that includes Federal Reserve minutes and the Democrats’ nomination convention.
On Monday, the dollar traded under gentle pressure at 93.039 against a basket of currencies. 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 risk-sensitive Australian dollar inched up to a three-session high of $0.7194. Nevertheless, it remained contained in the channel it has traded in for a week.
The rupiah and the won, and other Asian currencies, edged lower. Meanwhile, due to last week’s dovish language from the central bank, the kiwi remained weighted to $0.6534.
The yen, having dipped last week as a jump in United States yields drew Japanese investment to Untied States Treasuries, was steady at 106.54.
China and the US delayed a Saturday review of their Phase 1 trade deal.
Rodrigo Catril is a National Australia Bank senior Foreign exchange strategist. He said that it is good news in the sense that it is something they can place on the back burner for now.
Nevertheless, he added that other uncertainties are coming up that need to be resolved. Thus, he pointed to United States politics as a presidential election loom. Furthermore, new virus hot spots in Europe can challenge the perception that the euro is on an uptrend.
This is leading news of the market.