U.S. Dollar Rises On US-China Trade Deal Hopes

The U.S. dollar strengthened against its major counterparts in the European session on Tuesday, as investors cheered signs of progress in U.S.-china trade talks.

U.S. President Donald Trump on Monday said that China had already begun promised purchases of farm goods and that the first part of a wider commitment was almost complete.

Trade Representative Robert Lighthizer said efforts to commit the agreement to paper before the Asia-Pacific Economic Cooperation summit in Chile next month are “on track” though some work remains to be done.

Trump’s economics adviser Larry Kudlow indicated that tariffs scheduled for December could be cancelled if the talks go well.

The greenback strengthened to a 4-day high of 0.9892 against the franc, up from Monday’s closing value of 0.9857. Next near term resistance for the greenback is likely seen around the 1.01 level.

The U.S. currency that ended Monday’s trading at 1.1149 against the euro appreciated to a 4-day high of 1.1133. The greenback is seen facing resistance around the 1.10 mark.

The greenback edged higher to 1.3103 against the loonie, after falling to a 3-month low of 1.3071 at 9:15 pm ET. The currency may locate resistance around the 1.33 region, if it rises again.

Reversing from its early more than 5-week low of 0.6883 against the aussie and 1-1/2-month low of 0.6436 against the kiwi, the greenback advanced to 0.6855 and 0.6410, respectively. The next possible resistance for the greenback is seen around 0.67 against the aussie and 0.62 against the kiwi.

The greenback bounced off to 1.2922 against the pound, from a low of 1.2987 seen at 11:00 pm ET. The greenback is likely to challenge resistance around the 1.28 mark.

Data from the Office for National Statistics showed that the U.K. budget deficit for September increased for the first time in five years.

Public sector net borrowing excluding banks increased by GBP 0.6 billion from last year to GBP 9.4 billion in September. This was the first September year-on-year increase for five years. On the flip side, the greenback pulled back to 108.49 against the yen, after rising to a 5-day high of 108.73 at 8:15 pm ET. Should the currency drops further, it may challenge support around the 106.00 level.

Looking ahead, Canada retail sales for August and U.S. existing home sales for September will be featured in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com