The U.S. dollar and other G-10 Forex units started Monday on the cautious side during the Asian trade session.
Traders are wondering if the United States and China can sign a preliminary trade agreement to end a contentious trade war that has lasted over 16 months and roiled global financial markets. Global economic growth has also slowed down thanks to unneeded trade barriers.
This morning, according to Xinhua, China’s state owned media company, China and the United States have had “constructive talks” during a high level trade call over the weekend. No other details were given.
The dollar was last trading at 108.75 yen, as the Asian session entered the afternoon. The USD/JPY currency exchange rate has recovered from 108.235 yen hit towards the end of last week.
Traders should note that the USD/JPY Forex market faces an upside barrier near the 200 day moving average at 109 yen. A daily close above this level is needed to challenge 190.50 yen.
The dollar index was trading a bit lower and still near a low price point seen back on November 7 at 97.890.
Forex Traders Continue to Monitor Trade Commentary and are Cautious with the Dollar
The preliminary trade agreement, between the world’s two largest economic powers, also called the Phase One deal, was expected to be completed and signed on the sidelines of the Asian-Pacific summit in Chile this month.
This summit, thanks to political unrest, was cancelled as domestic riots made safety a concern. Since then headlines have surfaced that there is still work to be done.
Both China and the United States have not bridged gaps surrounding thorny issues including winding down tariffs.
This trade war has dented the global manufacturing sector, which has been slumping.
Last week, on Friday, the U.S. Federal Reserve released manufacturing data.
This release showed that the U.S. manufacturing downturn deepened for the month of October.
Factory output fell 0.6 percent. This was the biggest decline since May 2018. The September number fell half a percent.