Dollar falls on U.S.-China trade optimism

Market Review - 18/02/2019 23:12GMT  

Dollar falls on U.S.-China trade optimism

The greenback ended broadly lower against its G4 peers except versus the safe-haven yen on Monday as renewed U.S.-China trade optimism boosted risk appetite in holiday-thinned trading as U.S. markets were closed for President's Day holiday.  
  
Versus the Japanese yen, dollar found renewed buying at 110.40 in New Zealand and rose steadily to 110.61 in European morning on gain in global equities as well as U.S.-China trade optimism, then marginally higher to 110.65 in holiday-thinned North American session before trading sideways.  
  
The single currency went through a volatile session. The pair traded with a firm bias in Asia and gained to 1.1325 before retreating to 1.1295 in European morning. However, price erased its losses and rallied to session highs at 1.1334 in European afternoon on usd's weakness before retreating again to 1.1305 due to cross-selling in euro.  
  
The British pound went through a roller-coaster ride. Although cable initially opened higher to 1.2940 in New Zealand, price fell briefly to an intra-day low at 1.2893 in European morning after BBC reported a small group of Labour lawmakers is leaving the party. However, price pared its losses and rebounded to 1.2939 in European afternoon on dollar's weakness.  
  
Reuters reported Britain's opposition Labour Party is about to split as a small group of lawmakers will leave the party because they are upset with leader Jeremy Corbyn's approach to Brexit and a row over anti-Semitism, the BBC reported on Monday.   
  
In other news, Reuters reported Ireland is spending "hundreds of millions of euros" on preparing for a no-deal Brexit, which would be a "crazy outcome" of three years of EU-UK negotiations, Ireland's Foreign Minister Simon Coveney said on Monday.   
  
Coveney said the European Union wanted to find ways to help UK parliamentary ratification of the Brexit deal but that the lawmakers' asks needed to be "reasonable".   
  
He said the bloc would not remove the contentious Irish border backstop from the deal to replace it with "wishful thinking" solutions, or accept a fixed time-limit on the insurance measure.   
  
Data to be released on Tuesday :  
  
Swiss trade balance, exports, imports, Italy industrial orders, industrial sales, EU current account, construction output, ZEW economic sentiment, UK claimant count, ILO unemployment rate, employment change, average weekly earnings, Germany ZEW economic sentiment, ZEW current conditions, New Zealand GDT price index, and U.S. NAHB housing market index.