Home » U.S. dollar flat after Powell plays down further rate cuts; Eyes on Hong Kong

U.S. dollar flat after Powell plays down further rate cuts; Eyes on Hong Kong

Andia Rispah
  • November 15th 2019, 10:58
  • Last Updated: November 15th 2019, 10:59
  • The U.S dollar was flat in Europe on Friday ahead of more economic data later in the day.
  • The USD had received some support from the two days of Congregational statement by Fed Reserve Chairman Jerome Powell.
  • Asian traders continue to assess the most recent trade news as the dollar remained unchanged.

The U.S dollar was flat in Europe on Friday ahead of more economic data later in the day.

The USD is on course for a modest loss of around 0.2% this week, drifting as the world awaits the elusive U.S>-China trade deal.

China’s threat to crack down on unrest in Hong Kong is also keeping markets on edge. President Xi Jiping urged the city’s chief executive Carrie Lam to clamp down on protests late on Thursday. He called for forceful actions to punish those who had committed violent crimes — financial times reported.

However, the Financial Times also cited people familiar with the matter, saying that China’s top officials overseeing Hong Kong and Macau had delayed a visit to the city. They feared to inflame the situation further.

By 0900 GMT, the dollar index was at 98.050, changing little from late Friday. Both EUR/USD and GBP/USD pairs remained the same at $1.1025 and $1.2880, respectively.

The USD had received some support from the two days of Congregational statement by Fed Reserve Chairman Jerome Powell. Powell clarified that there would be no further cuts to the U.S. interest rates to bar a significant economic deterioration.

The modest uptick in unemployment claims last week, along with weakening producer price inflation on Thursday, clearly didn’t meet the requirement. However, there’s a chance that the U.S retail sales and industrial producer data, both due late on Friday, may send stronger signals of a slowdown.

Elsewhere, global trends towards lower interest rates continued, with cuts by the central banks of both Mexico and Egypt. Both the peso and Egyptian pound took the moves in their stride.

Asian traders evaluate the latest trade news

Asian traders continue to assess the most recent trade news as the dollar remained unchanged.

China’s Ministry of Commerce spokesperson- Gao Feng insisted again at a weekly press conference that the U.S. should roll back tariffs as part of the phase one deal.

“The trade war was begun with adding tariffs and should be ended by canceling these additional tariffs. It’s an important condition for both sides to reach an agreement,” Gao said.

“If both sides reach a phase one agreement, the level of tariff rollback will fully reflect the importance of the phase one agreement,” Gao added. 

Gai noted the countries’ trade delegations were in in-depth consultations on the topic.

U.S. President Donald Trump and Chinese leader Xi Jinping were widely expected to sign the deal in Santiago at the Asia-Pacific Economic Cooperation summit. However, Chile canceled the event in late October due to domestic unrest.

The People’s Bank of China (PBOC) unexpectedly extended loans through its medium-term lending facility (MLF) on Friday. But, the PBOC kept the interest rate on one-year MLF loans unchanged at 3.25%.

The PBOC also said it had injected 200 billion yuan ($28.60 billion) into financial institutions via the liquidity tool.

About the author

Andia Rispah
Andia Rispah
Andia Rispah is a Personal Finance & Investment Writer who helps Financial Advisors to create valuable content to help their clients make smarter financial investments. I use my industry experience to write content that builds awareness, trust and turns readers into raving fans.

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