The U.S. dollar depreciated against its major counterparts in the European session on Tuesday, as a U.S. tariff deadline on Chinese imports neared amid lack of clarity on trade deal.
Washington is set to impose new tariff hikes on $160 billion of Chinese goods on December 15, if the two sides fail to reach an accord.
China’s assistant minister of commerce Ren Hongbin said Beijing is hoping negotiations can conclude on a trade deal before the new tariffs kick in this weekend.
Markets also await meetings by the Federal Reserve and the European Central Bank as well as the outcome of Britain’s snap election Thursday for directional cues.
A two-day meeting of the Federal Reserve ends on Wednesday, with economists expecting no change in economic forecasts and the interest rate outlook.
The greenback held steady against its major counterparts in the previous session, except the pound.
The greenback fell to a 4-day low of 1.1085 against the euro, from a high of 1.1063 seen at 5:00 pm ET. The greenback may challenge support around the 1.12 mark.
Survey data from the ZEW – Leibniz Centre for European Economic Research in Mannheim showed that Germany’s economic sentiment strengthened notably to the highest level in 22 months in December as strong exports and labor market conditions boosted expectations among financial experts.
The ZEW Indicator of Economic Sentiment rose to 10.7 in December from -2.1 in November. This was the highest reading since February 2018, when the score was 17.8. The score was also well above the forecast of 3.5 points.
The greenback declined to 1.3190 against the pound, its lowest since April 1. If the greenback falls further, it is likely to test support around the 1.34 region.
Data from the Office for National Statistics showed that the UK economy stagnated in October as Brexit uncertainties and upcoming election weighed on most of the sectors.
Gross domestic product remained unchanged in October from September, when it was down 0.1 percent.
The greenback that closed yesterday’s trading at 0.9878 against the franc dropped to a new 5-week low of 0.9853. The greenback is seen facing support around the 0.96 mark.
Reversing from an early high of 108.66 against the yen, the greenback edged down to 108.51. The next possible support for the greenback is seen around the 106.00 level.
Data from the Bank of Japan showed that Japan M2 money stock rose 2.8 percent on year in November – coming in at 1,038.4 trillion yen.
That’s up from the downwardly revised 2.4 percent in October.
In contrast, the greenback appreciated to an 8-day high of 0.6811 against the aussie. The greenback is seen finding resistance around the 0.67 level.
Survey data from National Australia Bank showed that Australia’s business confidence declined in November, unwinding the increase seen in previous month, while business conditions remained unchanged.
The business confidence index dropped two points to zero in November suggesting that on average firms see no change in business conditions going forward.
The greenback rose to 1.3245 against the loonie, from its early low of 1.3224. Next key resistance for the greenback is possibly found around the 1.35 level.
The greenback hovered at a 5-day high of 1.6540 against the kiwi, from a 4-day low of 1.6568 seen at 9:15 pm ET. The greenback is poised to test resistance around the 1.63 level.