Forex – Dollar Fluctuates As Sino-U.S. Trade Row Clouds Outlook

Investing,com – The dollar fluctuated in Asia on Monday morning as investors awaited for cues from more developments of the Sino-U.S. trade row, which is expected to continue to drive the market this week with the opening of China’s Boao Forum on Tuesday when an official response is expected. Meanwhile, inflation data from China, Japan and the U.S. will be in focus this week.

The that tracks the greenback against a basket of six major currencies last stood at 89.87 at 11:00PM ET (03:00 GMT), up 0.07%, testing the 90 level after climbing up from the morning low at 89.83.

The trade tensions between the U.S. and China continued to simmer. After threatening additional tariffs on more Chinese goods last Friday, U.S. President Donald Trump said China “will take down its trade barriers because it is the right thing to do” on Sunday. Beijing said it would not back down in face of the trade war.

In addition, the U.S. will post inflation data this week. The U.S. producer price index, forecast at 0.1%, will be due Tuesday, while the core consumer price index, expected to be 0.2%, will come on Wednesday.

In China, the pair eased 0.10% to trade at 6.2983. The People’s Bank of China set the fix rate of yuan against the dollar at 6.3314, versus previous day’s fix of 6.3027.

With China’s Boao Forum opening on Tuesday, eyes will be on Chinese president Xi Jinping to see how he will address the trade disputes with the U.S. China’s foreign exchange reserves rose $9 billion in March as the softer dollar and rising Sino-U.S. trade tensions bolstered expecetations of the firmer yuan.

Meanwhile, China will publish March inflation data on Wednesday, which is forecast at 2.6% year on year from 2.9% in February.

The pair edged up 0.02% to 106.96. The U.S. confirmed that North Korean leader Kim Jong-un is willing to talk to President Trump about denuclearisation, which implied easing geopolitical tensions in East Asia that improved investors’ risk appetite. Japan will also report its producer price index on Wednesday, which is estimated to be 2.1% year-on-year in March compared to 2.5% in February.

Elsewhere, the pair gained 0.12% to trade at 0.7688. Investors await Wednesday’s speech from the Reserve Bank of Australia’s Governor Phillip Lowe to look for cues.

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