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Friday 3 July 2020
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Forex – Dollar Rises as U.S., Mexico Agree to Replace Trade Deal

Forex3 hours ago (Aug 28, 2018 01:39AM ET)

© Reuters. The dollar rose on Tuesday

Investing.com – The dollar rose on Tuesday, paring losses after reaching its lowest level since Aug. 2 in early trade after the Trump administration sealed a bilateral trade deal with Mexico, boosting optimism for an easing of global trade tensions.

The U.S. Dollar Index, which tracks the dollar against a basket of other currencies, was up 0.2% to 94.82 by 1:35AM ET (05:35 GMT) after U.S. President Donald Trump unveiled details of the agreement that he says will replace the North American Free Trade Agreement (NAFTA). The new deal is expected to last 16 years and will be reviewed every six years pending its approval by Congress, according to U.S. Trade Representative Robert Lighthizer.

The dollar has fallen more than 2% since earlier this month as U.S. President Donald Trump said he was “not thrilled” with the Federal Reserve’s decision to raise rates at a time when the U.S. government was trying to stimulate the economy.

Meanwhile, the Mexican peso closed about 0.8% higher on Monday after initially rising about 1.2% following the announcement of the trade deal.

The USD/CNY pair rose 0.1% to 6.8233, while the offshore yuan traded about 0.1% lower at 6.8017 per dollar. It was not far off 6.7818, its strongest since July 31 touched on Monday after the People’s Bank of China revived a “counter-cyclical factor” in its daily fixing over the weekend to support the currency. The PBOC lifted its official yuan midpoint to 6.8052 per dollar on Tuesday, 0.7% firmer than the previous fix of 6.8508 and largely matching market forecasts.

Elsewhere, the AUD/USD pair was down 0.4% to 0.7323, while the NZD/USD pair also lost 0.2% to 0.6680.

The USD/JPY pair traded 0.2% higher to 111.23.

Forex – Dollar Rises as U.S., Mexico Agree to Replace Trade Deal

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