U.S. Dollar Extends Rise On Reducing Trade Tensions
05 Avril 2018 - 12:36PM
RTTF2
The U.S. dollar continued to be higher against its major
counterparts in the European session on Thursday, buoyed by
reducing fears over a trade war between the U.S. and China after
Washington expressed willingness to negotiate a resolution for
proposed tariffs.
News that officials from U.S. and China had signaled their
desire for talks about the recently proposed tariff plans reduced
fears over trade spat.
Recently appointed White House economic advisor Larry Kudlow
said President Donald Trump's strident approach could be a tactic
to get China to negotiate on trade practices.
Data from the Commerce Department showed that the U.S. trade
deficit widened more than anticipated in February.
The Commerce Department said the trade deficit widened to $57.6
billion in February from a revised $56.7 billion in January.
Economists had expected the trade deficit to widen to $56.8
billion from the $56.6 billion originally reported for the previous
month.
The wider than expected trade deficit in February was the widest
since the $60.2 billion trade deficit recorded in October of
2008.
A separate report from the Labor Department showed a bigger than
expected increase in initial jobless claims in the week ended March
31st.
The report said initial jobless claims climbed to 242,000, an
increase of 24,000 from the previous week's revised level of
218,000.
Economists had expected jobless claims to rise to 225,000 from
the 215,000 originally reported for the previous week.
Traders now look ahead to the release of the Labor Department's
more closely watched monthly jobs report on Friday.
Employment is expected to increase by 198,000 jobs in March
after spiking by 313,000 jobs in February. The unemployment rate is
expected to dip to 4.0 percent from 4.1 percent.
The currency has been trading in a positive territory in the
Asian session.
The greenback climbed to a 2-1/2-month high of 0.9638 against
the franc, from a low of 0.9598 hit at 5:30 am ET. The greenback is
seen finding resistance around the 0.99 region.
The greenback spiked up to 1.2236 against the euro, its highest
since March 1. On the upside, 1.99 is seen as the next resistance
level for the greenback.
Final data from IHS Markit showed that Eurozone private sector
activity expanded at the weakest pace since the start of 2017 as
rates of growth moderated in both manufacturing and services.
The composite output index fell to 55.2 in March from 57.1 in
February. The score was also below the flash estimate of 55.3.
The greenback hit more than a 2-week high of 1.4001 against the
pound, from a low of 1.4097 hit at 8:45 pm ET. The greenback is
likely to find resistance around the 1.39 region.
Survey data from IHS Markit showed that the UK service sector
expanded at the weakest pace since July 2016 due to bad
weather.
The IHS Markit/Chartered Institute of Procurement & Supply
Purchasing Managers' Index fell more-than-expected to 51.7 in March
from 54.5 in February. The score was forecast to drop to 54.0.
The greenback bounced off to 0.7679 against the aussie, 0.7276
against the kiwi and 1.2801 against the loonie, from its early
9-day low of 0.7726, multi-week lows of 0.7322 and 1.2746,
respectively. The next possible resistance for the greenback is
seen around 0.75 against the aussie, 0.69 against the kiwi and 1.30
against the loonie.
Extending early rally, the greenback strengthened to more than a
3-week high of 107.24 against the yen. Further uptrend may take the
greenback to a resistance around the 108.00 level.
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