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US Dollar (USD) Sinks on Increased Risk Appetite as US-China Trade Talks Near ‘Final Round’

Published: 15 Apr at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling (GBP)

The Pound (GBP) rose today following the publication of the Rightmove House Price Index figures for April, which increased to 1.1%.

This buoyed market optimism in the UK economy, despite the Brexit uncertainty.

Meanwhile Brexit news was slow coming as MPs are on the parliamentary Easter recess.

However, there were indications that cross-party talks between the Conservatives and Labour were continuing, with some indications that these were, on the whole, constructive.

US Dollar (USD)

The US Dollar (USD) was weakened today by increased risk appetite as news that the US and China were drawing closer to a trade deal had traders fleeing for riskier currencies.

Steve Mnuchin, the US Secretary of the Treasury, announced that the two superpowers were in the ‘final round’ of discussions, buoying hopes that the two countries would reach a consensus.

Euro (EUR)

The Euro (EUR) also struggled on increased risk appetite, as traders fled the safe-haven currency for riskier assets in the wake of US-China trade talk progressions.

Last week’s positive Chinese economic data also weighed on the Euro, as fears over a weakening global economy eased.

With a lack of Eurozone economic data, many investors focused on global economic – and political – developments instead.

Australian Dollar (AUD)

The Australian Dollar (AUD) failed to gain against the Pound today despite benefiting from increased risk appetite, and, furthermore, its largest trading partner, China, showing promising economic recovery.

Many ‘Aussie’ traders are looking ahead to tomorrow, which will see the publication of the Reserve Bank of Australia’s meeting minutes.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) also failed to rise against the Pound, and with the NZ economy closely tied to US-China trade talk developments, it too benefited from indications of progress between the two superpowers.

Many ‘Kiwi’ traders, however, remained optimistic following the International Monetary Fund’s prediction that New Zealand’s growth rates would improve this year.

Canadian Dollar (CAD)

The Canadian Dollar (CAD), closely tied to the US Dollar, failed to gain today as traders fled for riskier assets due to the ‘final leg’ of the US-China trade talks.

A sense of gloominess also weighed on the ‘Loonie’, with many forecasters seeing its recent bout of resiliency about to wear thin following the rise in the West Texas Intermediate’s oil prices.

Mazen Issa, a Currency Strategist at the Toronto-Dominion Bank, concluded:

‘We’re basically looking at a situation that is very difficult to find any positives for the Canadian dollar overall. In fact, it’s probably going to continue to get worse.’

As of Monday, 15th April 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1588, GBP USD exchange rate was 1.3097, GBP AUD exchange rate was 1.8263, GBP NZD exchange rate was 1.936, GBP CAD exchange rate was 1.7516, and GBP CNY exchange rate was 8.7866.
Dominic Lee About Author: (422 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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