· The dollar drifted lower Wednesday, with the market in consolidation mode, as investors sought more clarity about ongoing U.S.-China trade negotiations.
The yen, a safe haven, was higher on the day against the dollar as some uncertainty crept back into the market. Still, as the United States and China work to narrow their differences enough to sign a “phase one” trade deal as early as this month, hopes of a breakthrough have boosted sentiment across world markets.
In mid-morning trading, the dollar index, which measures the greenback’s value against other major currencies, was 0.1% lower at 97.875, after hitting a three-week high on Tuesday.
The dollar was 0.2% softer against the yen at 109.00 yen, although still within sight of a three-months high hit last week at 109.285. Europe’s common currency, meanwhile, was a touch firmer at $1.1080.
The euro benefited from data released on Wednesday showing German industrial orders rose more than expected in September, offering a glimmer of hope for an export-powered economy hit hard by global trade tensions.
· A meeting between President Donald Trump and Chinese President Xi Jinping to sign an interim trade deal could be delayed until December as the two parties look to agree on the terms and a new venue.
A senior administration official told CNBC that the White House’s goal is still to reach an agreement with Beijing by Nov. 16 – when the now-canceled APEC summit in Chile would have taken place – but it’s not clear that timeline can be delivered.
A potential summit in Europe would be relatively neutral territory for the two leaders, both of whom are conscious of the political optics of signing a deal on the other’s home turf. Trump is scheduled to be in London for a gathering of NATO leaders on Dec. 3-4, and people close to the talks say a potential signing could happen nearby before or after that visit.
· Ever since President Donald Trump said he and President Xi Jinping would meet to sign a trade deal, Wall Street has been hanging on every speculative word about where and when that signing might take place.
So it was not surprising when stocks sold off Wednesday morning on a Reuters headline that quoted Trump administration sources as saying the phase one trade deal could be delayed until December and that Europe is a likely venue. CNBC confirmed the report.
A November deal was expected, and there were reports that a U.S. location was under consideration, like Iowa, as suggested by the administration, or Alaska and Hawaii, as proposed by China. An absolute deadline for a deal would be Dec. 15, the day a new round of tariffs on Chinese goods is set to go into effect.
· Prime Minister Boris Johnson on Wednesday promised to take Britain out of the European Union in January, speaking at a campaign rally he used to frame the country’s Dec. 12 general election as the most important in a generation.
· Support for British Prime Minister Boris Johnson’s Conservative party has dipped slightly in the last few days, according to a YouGov poll on Wednesday, as the formal launch of his general election campaign was marred by gaffes and a resignation.
The poll for Sky News showed support for the Conservatives down 2 percentage points at 36%, with Labour unchanged at 25%. Data for the poll was taken as Johnson’s campaign launch was overshadowed by the resignation of one of his ministers, a gaffe about the victims of a deadly tower blaze and a doctored video of an opponent released by his party.
The Liberal Democrats were one point up at 17% and the Brexit Party was unchanged at 11%.
· Oil prices fell on Wednesday after a much larger-than-expected build in U.S. crude inventories and after Reuters reported that the signing of a U.S.-China trade deal could be delayed until December.
The decline reversed the gains of the previous three sessions.
Brent crude fell $1.22, or 1.9%, to settle at $71.74. West Texas Intermediate crude lost 88 cents, or 1.5%, to settle at $56.35 per barrel.
Prices extended losses after Reuters reported that a meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign a long-awaited interim trade deal could be delayed until December as discussions continue over terms and venue.
Earlier, prices dropped after data from the Energy Information Administration (EIA) showed U.S. crude inventories rose by 7.9 million barrels in the week to Nov. 1, compared with analysts’ expectations for an increase of 1.5 million barrels.
Reference: Reuters, CNBC
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