USD steady as Yen struggles in subdued trade in Asia
- USD/JPY subdued ahead of the Christmas break.
- Concerns over the US-China relations benefited the JPY's safe-haven status.
- Contradictory developments around the US-China relations led to subdued trading ahead of the Christmas break.
The USD was stable while the Japanese Yen struggled in subdued trade during the holiday break.
Contradictory developments around the US-China relations kept a lid on the recent optimism led by an interim trade agreement between the world’s two largest economies. They held investors from placing any aggressive bets.
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It eventually turned out to be one of the critical factors that led to subdued trading ahead of the Christmas break.
But China has stepped up criticism that the U.S. is interfering in Hong Kong, Taiwan, and other matters it considers internal.
The U.S. Dollar Index was marginally higher, up 0.01% to 97.67 by 01:30 GMT on Tuesday.
The People’s Bank of China set its reference rate of the yuan at 7.0119 compares to 7.0117 on Monday.
Japanese Yen remains confined
The USD/JPY pair gained 0.02% to 109.42.
On Tuesday, the pair extended its sideways consolidative price action through the Asian session and remained confined in a narrow trading band, just below mid -109.00s.
Rates in Japan, which have been negative for most of the year, are now just above 0%. But the Bank of Japan said last week that they are likely to remain low.
The AUD/USD pair was down 0.04% to 0.6918.
The NZD/USD pair gained 0.04% to 0.6632.
The GBP/USD pair gained 0.07% to 1.2942. The pound gave up as much as 0.5% on Monday, coming off its worst week in two years, due to Brexit-related fears.
The U.S. President Trump said over the weekend that the U.S. and China would sign their phase one trade pact very shortly. Also, China announced on Monday that it would lower import tariffs from January 1 on around 850 US products – ranging from frozen pork to some semiconductors.
Markets in Hong Kong and Australia close early on Tuesday and are closed on Wednesday for the Christmas holiday.