Dollar falls broadly after U.S. and EU agree to reduce trade tariffs

Market Review - 25/07/2018  23:59GMT  

Dollar falls broadly after U.S. and EU agree to reduce trade tariffs

Although the greenback traded with a firm bias in New York morning ahead of U.S. and EU trade talk between Trump and European Commission President Juncker, dollar later tumbled in afternoon session on news report U.S. and EU agreed to reduce trade tariffs.  
  
Reuters reported U.S. and EU agreed to hold off on further tariffs while negotiations were taking place. Trump and European Commission President Jean-Claude Juncker said they were also working to eliminate tariffs and subsidies on non-auto industrial goods.   
  
Versus the Japanese yen, dollar met renewed selling at 111.38 in Asia and retreated to 111.14 in early European morning before dropping further to an intra-day low at 110.83 in New York morning on caution ahead of U.S.-EU trade talks. Price later hit session lows of 110.67 after the U.S./EU news before staging a recovery on active cross-selling in yen, price last traded near 110.97 at the close.  
  
Although the single currency dropped to 1.1675 in Asian morning, price gained to 1.1705 in European morning, then marginally higher to an intra-day high at 1.1712 in New York morning. However, price swiftly pared its gains and tumbled to session low at 1.1665 in New York after The Washington Post reported that Trump is considering a 25% tariff on foreign-made autos. However, euro later rallied to as high as 1.1738 on news of U.S. n EU agreed to reduce trade tariffs.  
  
The British pound traded sideways in Asia before gaining to 1.3174 in early Europe, then marginally higher to 1.3178 in New York morning. However, cable pared its gains and dropped session low at 1.3133 in New York after comments from UK PM May. Sterling later rallied in tandem with euro to 1.3200.  
  
Media sources reported that UK PM May, in an interview with 5 news said preparations for no-deal Brexit were "responsible, sensible".  
  
In other news, UK Finance Minister Hammond said 'would be strong resistance to creating any new divergence in regulations between Britain and Northern Ireland after Brexit; UK does not have legal basis to extend Article 50 period, even if we wanted to'.  
  
On the data front, the Commerce Department said new home sales decreased 5.3% to a seasonally adjusted annual rate of 631,000 units last month. May's number of units was revised down to 666,000 from an initial 689,000. Economists had forecast new home sales falling 2.8% to a pace of 669,000 units last month.  
  
Data to be released on Thursday:  
  
Australia export, import, Germany GfK consumer sentiment, France consumer confidence, Italy business confidence, consumer confidence, EU ECB interest rate decision, ECB deposite rate decision, ECB monetary policy statement, and U.S. durable goods, goods trade balance, wholesale inventories, initial jobless claims, KC Fed manufacturing index.