2 weeks ago
Forex

Dollar Gains on U.S.-China Trade Deal Hopes

Investing.com - The U.S. dollar edged higher in early European hours on Monday, on signs the United States and China

Investing.com - The U.S. dollar edged higher in early European hours on Monday, on signs the United States and China were close to striking a deal to end a bitter year-long trade dispute.

The Wall Street Journal reported on Sunday Washington could lift most or all of its tariffs on Beijing while a summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping to sign a final trade deal could happen later this month.

That followed comments from Trump last week that he had asked China to immediately remove all tariffs on U.S. agricultural products because trade talks were progressing well.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 96.51 by 3:45AM ET (08:45 GMT), its best level since Feb. 22.

Traders appeared to look past comments from President Trump, who said over the weekend that the Federal Reserve’s tight monetary policy was contributing to a strong dollar and hurting the United States’ competitiveness.

"We have a gentleman that likes a very strong dollar at the Fed... I want a strong dollar, but I want a dollar that's great for our country not a dollar that is so strong that it is prohibitive for us to be dealing with other nations," he told his supporters in a speech.

Against the Japanese yen, the dollar was a tad higher at 111.93 (USD/JPY), not far from Friday's 10-week peak of 112.07.

The euro slumped 0.3% to $1.1336 (EUR/USD), the lowest since Feb. 25. Markets are keeping an eye on the European Central Bank's monetary policy meeting later this week for further hints on whether it plans to relaunch its Targeted Long-Term Refinancing Operation (TLTROs).

Elsewhere, the British pound found support on easing fears that Britain will leave the European Union without a deal after Prime Minister Theresa May said last week lawmakers would get to vote on a delay to Brexit if they choose not to approve her withdrawal agreement.

The pound rose 0.2% to $1.3238 (GBP/USD), inching toward its near eight-month high of $1.3351 hit last week.

-- Reuters contributed to this report