Dollar ends lower vs G4 currencies on lingering U.S.-China trade tensions and falling U.S. yields

Market Review - 12/08/2019  23:42GMT  

Dollar ends lower vs G4 currencies on lingering U.S.-China trade tensions and falling U.S. yields

The greenback ended lower against its G4 peers on Monday as market concerns on U.S. and China's trade conflict continued to linger together with falling U.S. yields and the Dow.  
  
Versus the Japanese yen, although dollar retreated to 105.32 ahead of Asian open, price staged a rebound 105.56 in Asia on PBOC's yuan-fixing, then higher to 105.57 in European morning. However, the pair erased its gains and dropped to a fresh 7-month trough at 105.06 ahead of New York open on usd's broad-based weakness before recovering to 105.43, orice lasted traded at 105.29 near the close.  
  
Although the single currency traded with a steady undertone in Asia and edged higher to 1.1211 ahead of European open, price tumbled at European open on broad-based euro selling especially vs the sterling, price fell to 1.1163. However, the pair quickly pared intra-day losses and rallied to session highs at 1.1230 in New York morning on usd's broad-based weakness before moving narrowly.  
  
Reuters reported Italy's ruling League party would raise its public deficit target to 2.8% of gross domestic product to avoid hiking value-added tax, the party's main economics spokesman said in an interview with La Stampa newspaper on Monday.   League chief Matteo Salvini pulled the plug last week on its coalition government with the anti-establishment 5-Star Movement, starting a potential countdown to elections which the country may need to tackle alongside preparing its budget in autumn.     
Party economics chief Claudio Borghi, who has loudly criticised the euro, also told La Stampa there was no intention of starting a fight with the European Union over the currency.   
  
Although the British pound initially opened higher to 1.2076 (Reuters) in New Zealand on report that UK PM Boris Johnson will meet with Irish leader Leo Varadkar to discuss Brexit, price swiftly erased its gains and fell to a fresh 30-month trough at 1.2015 ahead of Asian open. However, cable found renewed buying in European morning and rallied to session highs at 1.2106 ahead of New York open before retreating to 1.2062 in New York after dismissal of earlier report.   
Reuters reported British Prime Minister Boris Johnson has accepted an offer to meet Irish leader Leo Varadkar to discuss Brexit and the Northern Irish backstop, the Sunday Telegraph said citing UK government sources.   
  
Reuters reported British Prime Minister Boris Johnson has no meeting scheduled with his Irish counterpart Leo Varadkar to discuss Brexit, Johnson's spokesman said on Monday.  A report in the Sunday Telegraph newspaper said an offer to meet the Irish leader to talk about the so-called Irish backstop had been accepted and dates were being discussed.    
The spokesman also said Johnson had been clear he still wanted to get a Brexit deal but hoped the European Union understood the British government's determination to leave the bloc on Oct. 31, "no ifs or buts".  
  
Data to be released on Tuesday:  
  
Japan corp goods price, tertiary industry index, machine tools orders, Australia NAB business condition, Germany wholesale price index, CPI, HICP final, ZEW economic sentiment, UK claimant count, ILO unemployment rate, employment change, average weekly earnings, EU ZEW economic sentiment and U.S. core CPI, CPI, redbook weekly earnings, redbook retail sales.