Dollar loses steam versus yen as trade deal, Brexit hopes face reality check By Reuters

  



By Tomo Uetake

SYDNEY (Reuters) – The dollar hovered below 2-1/2-month highs against the yen on Tuesday, failing to extend recent gains as optimism over trade negotiations between the world’s two largest economies and for an orderly British exit from the European Union started to fade.

In early Asian trade, the dollar was steady at 108.35 against the yen, still not far from its 2-1/2-month high of 108.63 yen marked on Friday.

The euro also stood flat at $1.1026 () versus the greenback, off Friday’s three-week high of $1.1062.

Although markets initially welcomed the “Phase 1” trade deal between the United States and China that President Donald Trump outlined last week, a lack of details kept many investors cautious.

“Media reports suggest China wants another high-level meeting later this month to finalize Friday’s agreement, suggesting that not all the details are nailed down,” said Alex Stanley, senior interest rate strategist at National Australia Bank.

“Market participants are conscious that previous U.S.-China ‘agreements’ have subsequently broken down amidst misunderstandings among the two sides.” 

A Bloomberg report on Monday, citing sources, said China wants more talks as soon as the end of October to hammer out the details of Trump’s phase 1 deal before Chinese President Xi Jinping agrees to sign it.

The negotiation between the UK and the European Union over Britain’s exit also looked equally fleeting.

Sterling slipped from a three-month high touched on Friday as last week’s euphoria gave way to doubts over whether a timely Brexit deal could be clinched. The pound was last quoted at $1.2604 versus the dollar, little changed on the day.

A deal to smooth Britain’s departure from the EU hung in the balance on Monday after diplomats indicated the bloc wanted more concessions from Prime Minister Boris Johnson and said a full agreement was unlikely this week.

Johnson says he wants to strike an exit deal at an EU summit on Thursday and Friday to allow an orderly departure on Oct. 31. If an agreement is not possible, he says he will lead the United Kingdom out of the club it joined in 1973 without a deal – even though parliament has passed a law saying he cannot do so.

The lira showed limited reaction after Trump imposed new sanctions on Turkey, but the currency stayed near seven-week lows against the dollar on concerns about a fallout from the country’s incursion in northern Syria.

In early Asia, the lira stood at 5.9239 per dollar , after having weakened some 0.8% on Monday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link