The United States Dollar marginally retreated against a basket of currencies in overnight trading, falling 0.22% to 96.22 to open the Asian session. It wasn’t an across the board affair however with the USD certainly appreciating against a number of China-aligned currencies.
The Greenback felt the effects of some familiar pressure points overnight with the US-China trade war continuing to add volatility to global markets. Ahead of the all important G20 meeting in Buenos Aries later this month, the US VP Mike Pence and President Xi weren’t afraid to ratchet up the rhetoric during the APEC summit, undermining market hopes of a reconciliation. Markets reeled at the news with key US equity index’s falling around 1.5% led by some notable tech stocks. Adding to the sell-off was the NAHB housing market index which had its worst drop in four years, further unsettling the market.
The Federal Reserve also added to the volatility with the New York Fed President John Williams speaking overnight and stressing that monetary policy wasn’t on a pre-set course. He commented that “we’ll adjust how we do monetary policy to do our best to keep the economy going strong with low inflation”. Williams statement, when added to Clarida, Kaplan and Harker’s recent comments seem to support the markets dovish interpretation and undermine the markets expectations of a December rate hike.
Tuesday is set to be another quiet day on the economic calendar with the market turning to the headlines for direction.