Asian currencies fueled by new trade optimism

© Reuters.  © Reuters.

Investing.com – Asian currencies made something of a comeback on Thursday morning in Asia as optimism about a possible trade deal between China and the US returned. The USD was lost a little ground and the Australian dollar stopped a multi-day slide even as the continued to slide.

On Wednesday US President Donald Trump said discussions between China and the US are going very well. Negotiators may be closers to an agreement on tariff relief that could help stave off the next round of US tariffs on Chinese goods that is due to take effect Dec. 15, Bloomberg reported. These tariff relief measures would be part of a phase one deal.

Trump’s comments came just a day after saying he has no deadline for a deal and would not be opposed to waiting until after the elections in November 2020.

The US dollar lost some ground. The , which tracks the greenback against a basket of currencies, was down 0.09% to 97.56 by 9:00 PM ET (02:00 GMT).

In mainland China, The People’s Bank of China (PBOC) set the reference rate for the yuan, the midpoint around which the currency is allowed to trade, at 7.0521, slightly weaker than the 7.0513 the day before.

The  pair was up 0.06% to 1.3112.

The  pair was also moving higher and was up 0.07% to 1.1084. 

The  pair gained in morning trading and was up 0.02% to 108.88.

The  pair was near flat, down 0.01% to 0.6848 while the was up 0.34% to 0.6550.

The New Zealand dollar has been gaining ground this week after reports on Monday that the country’s terms of trade, which measures the purchasing power of exports compared to imports, jumped 1.9% in the three months to September.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – U.S. Dollar Inches Up Amid Mild Trade Optimism 

© Reuters.  © Reuters.

Investing.com – The U.S. dollar inched up on Wednesday in Asia after President Donald Trump said Washington and Beijing are in the “final throes of a very important deal,” giving hopes that the two sides could soon sign a deal to put a hold on their 16-month trade spat.

However, Trump also reiterated Washington’s support for protesters in Hong Kong, a potential huge sore point with China.

“I’m holding it up because it’s got to be a good deal,” he said in an interview with Fox News. “We can’t make a deal that’s like, even. We have to make a deal where we do much better, because we have to catch up.”

The Chinese Ministry of Commerce said on Tuesday that the two countries had phone calls this week and had “reached consensus on properly resolving relevant issues”, but did not provide any further details.

The call was later confirmed by U.S. officials. But they also said that obstacles still remain.

The inched up 0.1% to 98.270 by 12:40 AM ET (04:40 GMT).

On the data front, U.S. fell for a fourth straight month in November despite expectations of a small rebound.

U.S. consumer spending data is due later in the day, along with GDP, jobless claims and durable goods.

The U.S. equity and bond markets will be shut on Thursday for the Thanksgiving holiday.

The pair slipped 0.1% to 1.1008. Euro area inflation for October is due on Friday.

Meanwhile, the pair also inched down 0.1% to 1.2851.

The pair climbed 0.1% to 109.14. The AUD/USD pair fell 0.2% to 0.6770.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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US October NFIB small business optimism index 102.4 vs 102.0 expected

Latest data released by NFIB – 12 November 2019

ForexLive

A mild improvement after a bit of a retreat in September. That said, the overall reading continues to hold up well in light of some mild softening in the US economy.

Looking ahead, this will be one of the more relevant data points in terms of gauging economic sentiment in the country – if things start to take a turn for the worse.

This is an index which measures the opinion of small businesses on the economic conditions in the country.

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Global optimism, UK spending promises lift long gilt yields to three-month high

© Reuters.  Global optimism, UK spending promises lift long gilt yields to three-month high © Reuters. Global optimism, UK spending promises lift long gilt yields to three-month high

By David Milliken

LONDON (Reuters) – British long-dated government bond yields rose to their highest in more than three months on Thursday as a global improvement in risk appetite and the prospect of big increases in public spending overshadowed a more dovish Bank of England.

Ten-year gilt yields () peaked at 0.814%, up around 9 basis points on the day and the highest since July 16, and 20- and 30-year yields gained a similar amount () ().

By contrast, two-year yields () barely budged — pinned down by an unexpected split vote at the Bank of England — and the two-year/10-year yield curve rose to its steepest since July 15 at 24 basis points.

The steepening yield curve reflected countervailing forces at play for different maturities of gilts.

Markets received a shock earlier in the day when two BoE policymakers unexpectedly voted to cut rates, and the majority said a rate cut could become necessary if Brexit uncertainty and a global slowdown did not ease.

One measure of interest rate expectations now prices in a two thirds chance of a quarter-point BoE rate cut by the end of next year, compared with just over half on Wednesday, pushing down on two-year and five-year gilt yields, which are already well below the BoE’s 0.75% Bank Rate.

But the broader tone in markets on Thursday was negative for fixed income assets, bolstered by increased optimism about a trade deal between the United States and China.

German 10-year Bunds , like their British counterparts, rose to their highest since mid-July.

And for longer-dated gilts, there was added upward pressure on yields from the second day of Britain’s election campaign, in which both the Conservative Party and the Labour opposition promised big increases in spending if they win the Dec. 12 vote.

The fiscal news was “arguably more significant” for gilts than the BoE decision, Capital Economics analyst Oliver Allan wrote in a note to clients.

Labour’s would-be finance minister, John McDonnell, promised an extra 150 billion pounds ($ 192 billion) of infrastructure spending during the next five years, on top of 250 billion pounds he has already promised for the coming decade.

McDonnell’s Conservative counterpart, Sajid Javid, said he would spend an extra 100 billion pounds.

Both plans would require a significant increase in gilt issuance over the medium term, and could push up inflation or BoE rates if the spending hits the economy at a time when it is close to full capacity.

However, Capital said it expected the increase in British yields to be limited as any significant rise would attract foreign investors at a time when yields on much euro zone debt are below zero.

“Although UK yields are low historically, they are not particularly low relative to those elsewhere in the developed world,” Allen said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Trade optimism supports dollar vs yen; Fed awaited

By Tom Westbrook

HONG KONG (Reuters) – Both the dollar and riskier Asian currencies held on to modest overnight gains on Tuesday, amid hopes for an easing in Sino-U.S. trade tensions and as investors waited for direction from this week’s Federal Reserve meeting.

U.S. President Donald Trump said a trade agreement looked to be ahead of schedule on Monday, without detailing the timing, while the U.S. also said it was studying whether to extend tariff suspensions due to expire in December.

That followed remarks late last week from both U.S. and Chinese officials saying they were “close to finalising” a deal that lifted trade-exposed currencies such as the Australian dollar, while weighing on safe-havens such as the Japanese yen.

The mood cautiously held on Tuesday.

The kept its gains to stand just under a five-day peak at $ 0.6842, while the greenback held on to its progress against the yen to stand at 108.96 yen per dollar, just below a three-month high hit overnight.

“So far the soundings coming from both the U.S. and China point to the likelihood of significant progress,” said Rodrigo Catril, National Australia Bank’s senior FX strategist.

He added, though, that China’s demand for a pullback on U.S. tariffs remained unresolved and warned talks could easily fail again if a compromise cannot be reached.

The dollar was steady against the euro () at $ 1.1096 and flat against a basket of currencies () at 97.755.

The New Zealand dollar was 0.2% higher at $ 0.6361. China’s yuan, which hit a six-week high in offshore trade on Monday, before retreating, was steady at 7.0617 per dollar.

Beyond the trade headlines, the major focus this week is the Fed meeting.

The U.S. central bank is expected to cut rates for a third time in a row when it concludes its two-day meeting on Wednesday.

Investors are watching for any indication that further cuts are likely, with futures pricing suggesting an expectation for further easing in 2020.

“The forward guidance will be the thing,” said Westpac analyst Imre Speizer in Auckland.

“It still looks like a done deal that they will cut, but then the risk is that they might characterise that as just one more insurance move … the market will have to take out the pricing it’s got for future dates.”

The British pound, meanwhile, nudged lower to $ 1.2857, with Brexit hanging in the balance.

The European Union has agreed to delay Britain’s exit for up to three months, but the country is politically paralyzed and overnight parliament rejected Prime Minister Boris Johnson’s third attempt to schedule a Dec. 12 election.

Johnson has said he would try again, by a different legislative route that would only require a simple majority, rather than a two-thirds majority.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Dollar underpinned by trade optimism; loonie lifts as Canada votes

By Tom Westbrook

HONG KONG (Reuters) – Signs that the U.S. and China were making progress in efforts to resolve their trade dispute supported both the dollar and trade-exposed Asian currencies on Tuesday, while the Canadian dollar rose as voters went to the polls in a closely-fought election.

The volatile pound sat just under a 5-1/2-month high at $ 1.2962, with the Brexit project in disarray but traders looking to another crucial parliamentary vote on Tuesday to determine the next step.

U.S. President Donald Trump said in Washington that work toward ending the U.S.-China dispute was going well, while White House adviser Larry Kudlow said tariffs scheduled for December could be withdrawn if progress is made.

Meanwhile Commerce Secretary Wilbur Ross said that while a deal may not be finalised next month, that was less important than securing “the right deal,” following Chinese Vice Premier and chief negotiator Liu He saying last week that Beijing is approaching talks from a basis of mutual respect.

“A concerted effort from both countries to manage market expectations of a longer negotiation was well accepted,” said Michael McCarthy, chief market strategist at brokerage CMC Markets in Sydney.

“It is now clear to investors that a comprehensive trade agreement will require many months of discussion.”

The dollar was steady against most major currencies in early Asian trade, holding only a fraction below a three-month high against the Japanese yen at 108.58 yen per dollar.

It lifted from a two-month low touched against the euro () overnight to steady at $ 1.1148, and was flat against a basket of currencies () at 97.304.

The Canadian dollar – the best performing G10 currency this year – climbed to a three-month high of 1.3082 per dollar overnight as voters turned out in an election expected to be too close to call.

It held near that level as the first polls closed, with Prime Minister Justin Trudeau seeking to cling to power against a strong challenge from opposition Conservatives.

The trade exposed Australian and New Zealand dollars drifted higher, though remained marginally below one-month peaks that both currencies touched overnight. The last traded at $ 0.6867 and the at $ 0.6409.

The pound held steady at $ 1.2969, with Brexit developments set to determine its fate.

With just over a week before Britain is due to leave the European Union, Boris Johnson’s push to re-run a parliamentary vote he lost on the weekend was rejected.

But he has resolved to press on with seeking to pass Brexit-related laws in parliament on Tuesday, with their progress to determine the timeline.

“While markets haven’t seen fit to reverse last week’s optimism that saw sterling smartly higher they aren’t yet prepared to take the pound up to the next level,” said National Australia Bank Head of FX Strategy Ray Attrill.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Sterling shines on Brexit hopes, yen eases on trade optimism

By Hideyuki Sano

TOKYO (Reuters) – Hopes of progress in U.S.-China trade talks and optimistic comments from Europe on Brexit pushed back the safe-haven yen and lifted the British pound and euro early on Friday.

Sterling was the biggest mover overnight, jumping 2% to a two-week high versus the dollar and posting its largest daily percentage gain in seven months on hopes of a Brexit resolution.

Irish Prime Minister Leo Varadkar said on Thursday a Brexit deal could be clinched by the end of October to allow the United Kingdom to leave the European Union in an orderly fashion, after what he called a very positive meeting with Boris Johnson.

Ireland is a major factor in the prolonged Brexit impasse.

Sterling last traded at $ 1.2431 , having risen up to $ 1.2469 on Thursday.

Against the euro, the pound also rose to two-week highs of 0.8831 pound to the euro () on Thursday and last stood at 0.8858.

The euro also gained against the dollar, rising to $ 1.1007 (). It had climbed as high as $ 1.1034 in U.S. trade on Thursday, its strongest in almost three weeks.

That helped to send the () to 98.709, a low last seen on Sept. 25.

Also undermining the dollar, data showed on Thursday U.S. consumer prices were unchanged in September and underlying inflation retreated, supporting expectations the Federal Reserve will cut interest rates in October.

The yen eased to 107.92 yen to the dollar , having shed about 0.45% the previous day.

Top U.S. and Chinese negotiators wrapped up a first day of trade talks in more than two months on Thursday, as business groups expressed optimism the two sides might be able to ease a trade war and delay a U.S. tariff hike scheduled for next week.

U.S. President Donald Trump told reporters that his team had a “very, very good negotiation with China,” and reiterated his plans to meet with Liu at the White House on Friday.

“Prospect of an interim deal were also boosted overnight following reports that President Trump was planning to meet Vice Premier Liu He on Friday,” Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney, said in a report.

The was also buoyed, with traded at 7.105 yuan per dollar , having hit a three-week high of 7.0990 to the dollar the previous day.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Trade optimism pressures yen but markets wary ahead of Fed, BOJ

By Stanley White

TOKYO (Reuters) – The yen was pinned near a six-week low versus the dollar on Friday as signs the United States and China were narrowing their differences over trade ahead of key talks decreased demand for safe haven assets.

That nudged the yuan up to near four-week highs against the U.S. currency in offshore trade, while the euro held steady after swinging wildly on Thursday following the European Central Bank’s surprise decision to resume government debt purchases from November to support a flagging economy.

In the very short-term, guarded optimism about a resolution to the U.S.-China trade war should continue to push Treasury yields higher and weigh on safe-haven currencies.

However, this confidence could be short-lived as the U.S. Federal Reserve is widely expected to cut interest rates next week while the ECB’s easing places pressure on the Bank of Japan to follow suit.

“We’ve managed to scale back our pessimism about U.S.-China trade talks, which is a supportive factor for now,” said Takuya Kanda, general manager of research at Gaitame.com Research Institute in Tokyo.

“Once we start to focus on the Fed’s rate cut, perceptions of the market will change. Treasury yields and dollar/yen look to be too high and are likely to start drifting lower.”

The dollar rose to 108.265 yen , the highest since Aug. 1.

The greenback was up 1.2% versus the yen this week, on course for its best weekly performance since November 2018.

The dollar has also drawn support from a spike in U.S. Treasury yields, with the benchmark 10-year yield at a five-week high.

U.S. President Donald Trump said on Thursday he would not rule out an interim trade pact with China.

The two sides are preparing for new rounds of talks aimed at curbing their trade war, which has dragged on for more than a year, roiling financial markets and threatening to push other economies into recession.

The yen, widely considered a safe-haven currency, tends to rise during times of heightened economic or market stress and vice versa.

China’s financial markets were closed for a public holiday on Friday. In offshore trade, the yuan rose 0.3% versus the dollar to 7.0459, the strongest since Aug. 19.

Sterling was up 0.3% on the dollar this week, on course for its second week of gains after the British Parliament moved to block a so-called no-deal exit from the European Union.

The pound remains vulnerable, however, given the continuing uncertainty over how lawmakers will decide the terms of the UK’s divorce from the EU.

The euro () held steady at $ 1.1068, on course for its second weekly gain against the dollar.

The single currency initially tumbled on Thursday after the ECB cut its deposit rate by 10 basis points to a record low of minus 0.5% and said it would restart bond purchases at a rate of 20 billion euros a month from Nov. 1.

The rate cut was widely expected, but the revived bond purchases were a surprise. Still, the euro managed to claw back losses as the ECB’s comprehensive stimulus package now shifts the spotlight to the Fed and BOJ policy meetings next week.

Financial markets have fully priced in a rate cut at the Fed’s Sept. 17-18 policy meeting. Most economists expect additional monetary policy easing in October and December.

The Fed cut rates in July for the first time since 2008.

Trump has publicly criticized the Fed for not cutting rates more aggressively, but positive economic data has cast some doubt on the need for extensive easing.

The BOJ is also brainstorming ways to deepen negative interest rates at minimal cost to commercial banks, as it considers adopting it as a main policy response to a slowing economy, sources familiar with the bank’s thinking said.

The BOJ’s next policy decision is due Sept. 19.

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Cautious optimism supports dollar ahead of ECB

By Tom Westbrook

SINGAPORE (Reuters) – Fragile investor confidence supported the dollar and weakened the yen on Wednesday but currency markets kept to tight ranges ahead of series of major central bank meetings over the next week.

Investor focus for now is centered on the European Central Bank’s meeting on Thursday, which is expected to push interest rates even further into negative territory.

The ECB could set the tone for upcoming rate-setting decisions by the U.S. Federal Reserve and the Bank of Japan next week, and for the broader global risk appetite.

For now, a cautious risk-on mood has prevailed after political crises that had hobbled markets, from Britain to Hong Kong, abated, taking the shine off safe-haven assets.

Bonds slid overnight and the yen hit 107.65 per dollar, its lowest since Aug. 1.

Overhanging the relief buying, however, are signs of a slowdown in global demand, which have offset recent positive developments in U.S.-China trade negotiations.

The euro (), which has shed 3% since June, was flat at $ 1.1047. The dollar was flat against the Australian dollar at $ 0.6860 and steady on the yen and the New Zealand dollar .

“Expect a quiet day of trading, with some support of risk, as a broader cyclical rotation continues,” Australia and New Zealand Banking Group analysts said in a note.

“Speculation over whether the ECB will enact a new QE program on Thursday continues to ebb and flow.”

ECB policymakers are leaning toward a package that includes a rate cut, a pledge to keep rates low for longer and compensation for banks over the side-effects of negative rates, five sources familiar with the discussion said last week.

On the other hand, concerns have been building that global central banks are reaching the limits of their stimulus options, especially those with negative interest rates and sub-zero long-term sovereign bond yields.

“Given the chance that the ECB fails to match market expectations for easing policy, the balance of risks favors higher EUR/USD and European FX outperformance,” ING forex strategists said in an overnight note.

Much of the positive mood in recent days has been driven by optimism that a high-level meeting of U.S. and Chinese negotiators at Washington next month can deliver some sort of trade-war circuit breaker.

That was tamped down somewhat by White House trade advisor Peter Navarro on Tuesday, when he urged patience about resolving the two-year trade dispute between the world’s two largest economies and said to “let the process take its course.”

But the prospect of a breakthrough stoked appetite for Asian currencies such as the trade-exposed South Korean won , which drifted higher in Asian trading hours and to around 1189.50 per dollar, close to its highest since Aug. 2.

The yen, already under pressure as investors spurned safe havens, was further sold overnight after Reuters reported BOJ policymakers are more open to discussing the possibility of expanding stimulus at their board meeting on Sept. 18-19.

And the pound has held on to last week’s gains after British parliament passed a law compelling Prime Minister Boris Johnson to seek a delay to the Oct. 31 date for leaving the European Union. Sterling last traded at $ 1.2353.

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Yen rises as traders temper optimism over U.S.-China trade deal

© Reuters. Light is cast on a Japanese 10,000 yen note as it's reflected in a plastic board in Tokyo, in this picture illustration © Reuters. Light is cast on a Japanese 10,000 yen note as it’s reflected in a plastic board in Tokyo, in this picture illustration

By Hideyuki Sano and Stanley White

TOKYO (Reuters) – The yen rose on Tuesday as some investors tempered their optimism about the chances for a quick resolution to the U.S.-China trade war, which boosted so-called risk-off trades.

Global markets have been whipsawed by dramatic twists in the trade dispute this month. U.S. President Donald Trump on Monday flagged the possibility of a trade deal with China, days after both sides announced new tariffs.

The dollar came under additional pressure versus the yen as a decline in U.S. Treasury yields showed some investors still favored the safety of government debt.

The currency market also took some relief from a stronger-than-expected daily yuan fixing by the People’s Bank of China, which many traders considered an attempt to slow the yuan’s decline versus the dollar.

While Washington and Beijing have shown a willingness to return to the negotiating table to resolve their trade row, there are lingering concerns about a lack of a clear path toward resolving a dispute that has dragged on for more than a year and hurt global growth, corporate profits and investments.

“The dollar rallied overnight due to optimism about a trade deal, but there’s a sense that the market has gotten a little ahead of itself,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities.

“Some traders can book a little profit here. There are still so many issues that can trigger a clash between the United States and China. Treasuries shows the market is still somewhat skeptical.”

The yen rose around 0.4% in Asian trading to 105.76 per dollar.

The yen, which tends to be bought in times of economic uncertainty, also rose around 0.6% versus the Australian and New Zealand dollars.

The () measuring the greenback against a basket of six major currencies was little changed at 98.011.

Benchmark 10-year U.S. Treasury yields () fell to 1.5249% in Asia. The yield curve was inverted as 2-year yields traded at 1.5326%, which is commonly considered a sign of an impending economic recession.

On Monday the greenback rebounded from near eight- month lows of 104.46 yen after some signs of rapprochement between Washington and Beijing soothed investors’ nerves.

Speaking on the sidelines of the G7 summit of world leaders in France on Monday, U.S. President Donald Trump said Chinese officials had contacted U.S. trade counterparts overnight and offered to return to the negotiating table.

Trump’s comments sparked a wave of so-called risk-on trades, which initially boosted the dollar, weakened safe-haven currencies, and lifted stock markets.

However, some doubts have crept into markets as a Chinese Foreign Ministry spokesman said he had not heard that a phone call between the two sides had taken place. The Commerce Ministry, which typically releases statements on trade calls, did not respond to a request for comment.

Prior to market opening, the People’s Bank of China (PBOC) lowered its official midpoint to 7.0810 per dollar. That was a fresh 11-1/2-year low, but still at a stronger setting than traders had expected.

In onshore trade the dollar rose 0.13% to 7.1615 yuan , strengthening less than 0.76% from Monday, as traders said the Chinese central bank kept the yuan from weakening faster.

Attempts to slow the greenback’s rise against the yuan also weighed the dollar down versus the yen, traders said.

“I was quite surprised by the big gains in the dollar/yen overnight. But it is unclear what the U.S. and China will do next, and I would expect the dollar to consolidate for the time being,” said Kyosuke Suzuki, director of forex at Societe Generale (PA:).

The euro was quoted at $ 1.10985 (), little changed on the day.

Sterling traded at $ 1.2216 , after a 0.5% fall on Monday as investors reassessed whether British Prime Minister Boris Johnson had made any progress in convincing the European Union to renegotiate the Brexit agreement.

Johnson said on Monday he was prepared to take Brexit talks with the European Union down to the very last minute before the Oct. 31 exit deadline, and if necessary to take a decision to leave without a deal on that day.

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