Dollar retreats broadly as risk sentimets returns on optimism over US/China trade talks

 Market Review - 12/02/2019  23:58GMT  

Dollar retreats broadly as risk sentimets returns on optimism over US/China trade talks

The greenback snapped its recent winning streak and ended lower against its peers on Tuesday as investors remained optimistic that U.S.-China will have a breakthrough in trade talks which triggered risk appetite. Sterling rebounded from a 3-week low after UK PM Theresa May said the government would seek to speed up ratification of its Brexit withdrawal deal with the EU if time gets too tight.  
  
Versus the Japanese yen, although dollar traded with a firm bias and rose to a 6-week high at 110.65 in Asia on gain in the Nikkie (N225 ended up 2.61% at 20864) and rising U.S. Treasury yields, price later retreated to 110.35 in New York on renewed usd's weakness.  
  
The single currency traded narrowly in Asia and despite a brief but sharp fall to a +near 3-month low at 1.1258+ in European morning, price found renewed buying and rose to session highs at 1.1341 in New York on dollar's weakness before easing.  
  
The British pound went through a roller-coaster ride. Although cable moved sideways in Asia, price edged up to 1.2885 in European morning and then fell sharply to a 3-week low at 1.2833 on renewed Brexit concerns as investors remained worried if an orderly deal will be struck. However, renewed buying emerged and price rallied to session highs at 1.2909 in New York afternoon after UK PM May's remarks and dollar's weakness before retreating.  
  
Reuters reported the government will seek to speed up the ratification of its Brexit deal with the European Union if time gets too tight to pass legislation before Britain's March 29 exit day, Prime Minister Theresa May said on Tuesday.   
  
May told ministers earlier on Tuesday that parliament, which last month roundly rejected her Brexit deal, would not vote on a revised deal this week. Media have reported a fresh vote is not expected until late February at the earliest.  
  
In other news, Reuters reported U.S. congressional negotiators on Tuesday were hopeful lawmakers would pass a deal to avert another partial government shutdown, even as it remained unclear whether Republican President Donald Trump would back an agreement containing funds for border security but not a wall.   
  
On the data front, Reuters reported U.S. job openings surged to a record high in December, led by vacancies in the construction, accommodation and food services sectors, which could bolster views that the economy is experiencing a dearth of workers.  
  
Job openings, a measure of labor demand, increased by 169,000 to a seasonally adjusted 7.3 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS, on Tuesday. That was the highest level since the series started in 2000.  
  
Data to be released on Wednesday :  
  
Australia Westpac consumer survey, Japan corp goods price, New Zealand RBNZ interest rate decision, UK CPI, RPI, PPI input, PPI output, EU industrial production, and U.S. CPI, real weekly earnings, Federal budget.