- Dollar weakens against a basket of major currencies.
- Vaccine hopes lift stocks, while currencies still struggle.
The Australian dollar and Chinese Yuan went up as the US dollar declined after the latest trade talks between the United States and China was termed as a success by both sides. Traders have been expecting a continuation of workable trade relations between two countries even when the diplomatic relations worsened in recent months.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin discussed trade relations with Chinese vice Premier Liu He. The American side described that both sides saw progress in the talks while Beijing considered the dialogue as constructive.
The positive vibes after the talk lifted the Australian dollar and British pound by 0.2 Percent to 0.7171 and 1.3088 dollars, respectively. The dollar fell 0.2 Percent against the euro to 1.1813 dollars. Chinese Yuan firmed up to 6.9070.
The riskier currencies were also supported by the news report about the fast-tracking of an experimental drug, being developed by AstraZeneca and Oxford University, for approval by the Trump administration before the November elections.
Investors are waiting for the speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium later in the week and expect him to sound dovish and to comment on the speculation of a more accommodative stance on inflation.
Markets might have already priced in the dovish stance and hence can’t expect much action from such a policy continuation. But, as FOMC minutes indicated, less dovish indications could send the dollar up.
Also awaited were Germany’s IFO Business Climate index, US consumer confidence figures and US new homes sales.
