Trump’s compromise with China takes the US dollar down
Safe-haven options on the forex market lost ground in trading against riskier currencies. Traders were reassured by the prospect of a relatively peaceful resolution of the latest US-China conflict.
The Australian dollar, which usually responds strongly to the trade news, gained 1%, reaching US$0.6742. Kiwi, the pound and the Canadian dollar all added 0.5%, A number of other commodity currencies saw significant gains as well, putting the US dollar close to its lowes position in the last 11 weeks.
Traders were relieved by the recent development of US-China tensions. President Trump revealed that he is not planning to cut the first phase of the trade deal. The United States will likely terminate the special status of Hong Kong, which is still bad, yet not as detrimental as the new trade war.
In other positive news, Markit Purchasing Managers demonstrated a slight growth of industrial activity in China.