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Dollar Slips After U.S.-China Trade Truce

Investing.com - The dollar was lower on Monday after the U.S. and China agreed to a temporary trade war truce, while sterling inched down amid worries over Brexit.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.30% to 96.90 as of 10:28 AM ET (15:28GMT).

Investors turned away from risk-averse assets after U.S. President Donald Trump and Chinese President Xi Jinping agreed at the G20 summit to hold off on increasing tariffs as the two continue trade talks. Trump agreed not to increase tariff rates on $200 billion worth of Chinese goods, while Xi agreed to purchase more American goods and reduce tariffs on U.S. car imports.

Meanwhile, Federal Reserve Vice Chairman Randal Quarles said that while the Fed continues to watch data it shouldn’t react “to every wavering of the needle.”

The dollar has been pressured recently over comments from Fed Chairman Jerome Powell that rates are near neutral, leaing to speculation the central bank could stop increasing interest rates soon. Powell was expected to testify at Congress on Wednesday, but the hearing was cancelled due to a national holiday in remembrance of President George H.W. Bush, who died on Friday.

The dollar was flat against the safe-heaven Japanese yen, with USD/JPY at 113.59.

The pound inched down as traders worried that UK Prime Minister Theresa May won’t get the votes she needs in Parliament to pass the Brexit draft agreement next week. GBP/USD fell 0.13% to 1.2731.

The euro was higher, with EUR/USD up 0.31% to 1.1352.

Elsewhere, NZD/USD jumped 0.96% at 0.6932, while AUD/USD increased 0.85% to 0.7366.

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