Forex – Dollar Slips After U.S.-China Trade Truce

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Forex - Dollar Slips After U.S.-China Trade Truce

Investing.com – The dollar was lower on Tuesday as traders questioned if the U.S. and China will reach a trade deal and U.S. President Donald Trump tweeted about his love of tariffs.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.18% to 96.79 as of 10:51 AM ET (15:51 GMT).

The two nations declared a 90-day truce over the weekend, but tweets from Trump dampened sentiment as he said his team was waiting to see if a deal with China could actually be done.

“I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so,” he tweeted.

A flattening yield curve on U.S. Treasuries also worried investors, with the curve between 3-year and 5-year notes inverting for the first time since 2007. Inversions happen when yields on longer bonds are lower than shorter-dated bonds.

The pressure on Treasury yields and slowing global growth has some analysts worrying about a possible U.S. recession.

The dollar was lower against the safe-heaven Japanese yen, with USD/JPY falling 0.65% to 112.95.

The pound pared back from earlier gains, but still remained in the green, after the advisers to the European Court of Justice said the UK could withdraw from Article 50 without approval from the European Union. UK Prime Minister Theresa May said the government would still continue with its plans to withdraw from the member bloc. GBP/USD rose 0.16% to 1.2742, down from an earlier high of 1.2833.

The euro was also higher, with EUR/USD up 0.14% to 1.1371.

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