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Dollar Edges higher; Yuan also gains after Biden / Xi talks by

By on November 16, 2021 0

By Peter Nurse – The dollar edged higher on Tuesday, ahead of the release of key retail sales data, as the Chinese yuan benefited from the largely friendly dialogue between the U.S. and Chinese presidents in a virtual meeting.

At 02:55 ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.1% higher at 95.468, near a new high of 16 month.

fell 0.1% to 6.3777, just above the five-month low reached earlier in the session, after a virtual meeting between US President Joe Biden and his Chinese counterpart Xi Jinping took place relatively well, albeit without any dramatically positive news.

Leaders of the world’s two largest economies have agreed that their countries need to increase communication and cooperation, a positive tone that has left forex markets to consider the possibility of lower trade tariffs in the near future.

Moreover, it rose 0.3% to 1.3451 after the publication of a stronger-than-expected UK, raising the chances that the Bank of England would raise interest rates in December.

British employers added 160,000 net workers to their payroll in October, indicating that the economy had successfully negotiated the end of the government’s job protection leave program.

The Bank of England decided not to raise interest rates at its last meeting, wanting to see how the economy as a whole held up after its plan to support jobs ended, but these numbers should help the central bank focus on fighting inflation.

Sticking to economic data, US data for October is expected later in the session. These will be watched closely to see that consumer demand remains strong even in the face of high inflation levels, which could put more pressure on the Federal Reserve to act against rising prices.

Elsewhere, it gained 0.1% to 1.1375, rebounding somewhat after falling earlier to a 16-month low, hit by the European region being hit again by a new wave of Covid-19 cases.

Austria and the Netherlands have already implemented partial closures, and a number of other countries are considering such measures as Christmas and the winter season approaches.

European Central Bank President Christine Lagarde insisted during her testimony to the European Parliament on Monday that the central bank would not rush into interest rate hikes, and this accommodative stance is weighing on the currency as well. unique.

rose 0.1% to 114.25, while it fell 0.1% to 0.7339 after Reserve Bank of Australia director Philip Lowe again pushed back on the idea a rate hike from 2022.

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