Dollar steadies ahead of Fed Meetings, and the looming tariff deadline

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Written on Dec 10, 2019

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USD remained unchanged in Asia ahead of the Fed meeting and the looming tariff deadline later this week
Investors are keen to see if the U.S. will go ahead with the planned Dec 15 tariff hike on Chinese goods.
U.S. Agriculture Secretary Sonny Perdue says the U.S. is unlikely to impose more tariffs on Chinese exports on Dec 15.

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On Tuesday, the USD remained unchanged in Asia ahead of the Fed meeting and the looming tariff deadline later this week.

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The U.S. Dollar index was also unchanged at 97.610 by 04:30 GMT.

Expected this week are policy meetings at the US Fed Reserve and the European Central Bank.

While the two banks may not announce any major changes to their policies, traders will pay more attention to clues on whether more easing is in store next year.

Investors are almost certain that the U.S. Fed Reserve will hold rates steady on Wednesday, which has increased investors’ focus on finding a trade-war truce.

Looming US-China tariff deadline

Investors are keen to see if the U.S. will go ahead with the planned Dec 15 tariff hike on Chinese goods.

According to Bloomberg overnight report, the U.S. Agriculture Secretary Sonny Perdue said the U.S. was unlikely to impose more tariffs on Chinese exports on Dec 15.

“We have a deadline coming up on the Dec 15 for another tranche of tariffs, I do not believe those will be implemented, and I think we may see some backing away,” Perdue said.

On Monday, China said it hoped to make a trade deal with the US as soon as possible, though it gave no new details or insight into talks’ progress.

The European Central Bank is likewise expected to keep interest rates steady, while the GBP’s fate is in the hands of voters at Thursday’s British election.

The GBP sat at $1.3144, just below a seven-month high hit last week, as polls pointed to a Conservative victory decisive enough to secure a parliamentary majority.

The EUR/USD pair traded near flat at 1.1065.

The GBP/USD pair inched up 1% to 1.3151.

Both the AUD/USD pair and the NZD/USD pair gained 0.2%.

The USD/JPY pair edged up 0.1% to 108.62.

The USD/CNY pair changed little at 7.0382, little impacted by data today that showed China’s producer price index was down 1.4% year-on-year, falling for the fifth month in a row.

The drop compared with the 1.5% expected decline and the 1.6% fall in October.

Meanwhile, the consumer price index for November jumped 4.5% year-on-year, as food prices skyrocketed 19.1% amid an outbreak of African swine fever.