News: FOREX-Dollar slides after dovish Fed minutes, U.S.-China trade optimism

  1. 69,508 Posts.
    lightbulb Created with Sketch. 484
    • Beijing and Washington agree to extend trade talks
    • Euro, sterling rise as trade hopes boost risk appetite
    • Oil up; lifts Australian, New Zealand, Canadian dollars
    • Fed minutes show policymakers urge patience on rate hikes
    • Graphic: World FX rates in 2018

    (Adds Fed minutes, new comment, updates prices)

    The dollar tumbled on Wednesday to its lowest level since October after the Federal Reserve expressed caution about future rate hikes, and as investors reduced safe-haven bets due to optimism about U.S.-China trade talks.

    After initially slipping following poor German and French economic data earlier, the euro recovered to post its highest in about three months. The Swiss franc gained as well, climbing to its strongest rate against the dollar since late September.

    These currencies gained at the expense of the dollar after several Fed policymakers said last month they could be patient about future interest rate increases. A few of the officials also did not support the central bank's rate increase that month, according to the Dec. 18-19 policy meeting minutes.

    "It will probably be mid-year before the Fed excites hike prospects again," said Joseph Trevisani, senior analyst, at in New York.

    News that China and the United States had extended trade talks in Beijing for an unscheduled third day boosted oil prices and broader sentiment earlier in the trading day. Expectations of more easing in China helped the mood as well, with Asian and European shares rallying.

    "As long as you don't see a situation where there is a negative turn much like what we saw over the last quarter, markets will probably view any trade development, even if they're not concluded by the March 1 deadline, with modest optimism just because it reduces the downside risk to the outlook," said Mazen Issa, senior FX strategist, at TD Securities in New York.

    In afternoon trading, the dollar index fell 0.8 percent to 95.207 .DXY , after earlier sliding to a three-month trough.

    The euro rose 0.8 percent to $1.1537 EUR= , while sterling gained 0.6 percent versus the dollar to $1.2795 GBP= .

    Europe's single currency briefly gave up gains after disappointing trade data out of Germany and a fall in consumer confidence in France.

    A day earlier, regional data showed German industrial output fell for the third straight month, feeding investor concern about a slowdown.

    Against the yen, the dollar was down 0.6 percent at 108.15 JPY=

    Commodity-linked currencies also jumped, buoyed by the recovery in oil and trade talk hopes.

    The Australian dollar, a barometer of sentiment toward China, was up 0.6 percent at US$0.7178 AUD= . The Aussie has bounced off near-decade lows below $0.68 reached earlier this month.

    The rally in riskier assets has accelerated since last Friday when Fed Chairman Jerome Powell said he was aware of risks to the economy and would be patient and flexible in policy decisions.

    That eased concern the Fed would be raising rates as the U.S. economy weakened.

    	Currency bid prices at 2:47PM (1947 GMT) 
     Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
    											  Previous				   Change				  
     Euro/Dollar	  EUR=		$1.1533		$1.1440	 +0.81%		 +0.56%	  +1.1552	 +1.1436 
     Dollar/Yen	   JPY=		108.3300	   108.7300	-0.37%		 -1.75%	  +108.9900   +108.0400 
     Euro/Yen		 EURJPY=	 124.97		 124.40	  +0.46%		 -0.99%	  +125.0700   +124.3700 
     Dollar/Swiss	 CHF=		0.9754		 0.9811	  -0.58%		 -0.61%	  +0.9820	 +0.9734 
     Sterling/Dollar  GBP=		1.2788		 1.2717	  +0.56%		 +0.24%	  +1.2803	 +1.2712 
     Dollar/Canadian  CAD=		1.3216		 1.3272	  -0.42%		 -3.09%	  +1.3279	 +1.3180 
     Australian/Doll  AUD=		0.7180		 0.7139	  +0.57%		 +1.86%	  +0.7193	 +0.7135 
     Euro/Swiss	   EURCHF=	 1.1254		 1.1225	  +0.26%		 +0.00%	  +1.1264	 +1.1211 
     Euro/Sterling	EURGBP=	 0.9020		 0.8997	  +0.26%		 +0.40%	  +0.9041	 +0.8975 
     NZ			   NZD=		0.6797		 0.6721	  +1.13%		 +1.19%	  +0.6808	 +0.6723 
     Dollar/Norway	NOK=		8.4645		 8.5471	  -0.97%		 -2.02%	  +8.5526	 +8.4529 
     Euro/Norway	  EURNOK=	 9.7658		 9.7821	  -0.17%		 -1.42%	  +9.7875	 +9.7544 
     Dollar/Sweden	SEK=		8.8756		 8.9277	  +0.25%		 -0.98%	  +8.9460	 +8.8586 
     Euro/Sweden	  EURSEK=	 10.2391		10.2136	 +0.25%		 -0.24%	  +10.2445	+10.1946                    
GET SUPPORT arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.