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US Dollar Edges Higher on US-China Talks, Jobs Numbers

September 5, 2019 at 17:25 by Andrew Moran

One dollar note with an American eagleThe US dollar is edging slightly higher on Thursday against several major currency rivals, driven by a potential de-escalation in US-China trade tensions and optimism over the upcoming August jobs numbers. The flurry of positive economic data also contributed to the greenback’s rebound.

Global financial markets rallied on Thursday after the Chinese government announced that its trade representatives will travel to Washington next month to meet with American negotiators. Reports further suggest that Beijing’s renewed talks could lead to something fruitful, which could mean that the world’s two largest economies are ready to call it quits on tit-for-tat tariffs and reach an agreement.

Speaking in a phone call with Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer, Vice Premier Liu He reached out for “serious” discussions on renewed talks in the hopes of progress in the 18-month-old trade dispute.

Both countries raised tariffs on September 1. The US does expect to add more tariffs on October 1, and then both nations are scheduled to impose additional levies on December 15.

On the data front, initial jobless claims for the week ending August 31 came in lower than projected, clocking in at 217,000. But it was the indexes that boosted investor sentiment toward the end of the holiday-shortened trading week.

The Institute for Supply Management (ISM)’s non-manufacturing purchasing managers’ index (PMI) surged from 53.7 in July to 56.4 in August. Also, its non-manufacturing business activity rose from 53.1 to 61.5. But the ISM non-manufacturing employment index dipped from 56.2 to 53.1.

In July, factory orders advanced 1.4%, up from 0.5% in June.

On Friday, the August labor report will be released and the market is penciling in a gain of 158,000 jobs and an unchanged unemployment rate of 3.7%.

Markets will also pay attention to Federal Reserve Chair Jerome Powell’s speech on late Friday afternoon.

The USD/CAD currency pair rose 0.14% to 1.3244, from an opening of 1.3224, at 17:17 GMT on Friday. The EUR/USD dipped 0.04% to 1.1036, from an opening of 1.1041.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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