The U.S. dollar slipped on Tuesday despite a trade truce between the U.S. and China. Having registered across the board gains yesterday, the US Dollar witnessed profit-booking during early Tuesday as global traders asses recently positive signs from the US-China trade truce. Doubts were triggered after China’s Huawei said it is still to get orders from the US Commerce Department.
The recent lent extra oxygen to the risk-associated complex yesterday, driving yields higher and sponsoring quick outflows from safe havens. At the same time, the positive developments from the Trump-Xi meeting somehow collaborated with mitigating speculations of a Fed move on rates in the short-term horizon.
In today’s docket, German Retail Sales contracted at a monthly 0.4% during May, while Producer Prices for the same period are due later in the European morning. The UK Markit Construction Purchasing Managers’ Index (PMI) for June could also entertain GBP traders, due at 08:30 GMT.
Across the pond, speeches by FOMC’s Williams and Mester should keep investors focused on the Dollar. Furthermore, the BOE Governor’s speech at 14:05 GMT carries higher importance as investors seek clues of future monetary policy amid uncertainty surrounding the Brexit.
Oil gained on Tuesday as producer club OPEC agreed to extend supply cuts until next March, although prices were pressured by worries demand could ease amid hints of a slowdown in the global economy.
Prices of safe-haven gold rebounded on Tuesday after falling below the $1,400 level as a trade truce between the U.S. and China boosted risk appetite. However, concerns over global economic growth - reinforced by the awful manufacturing PMIs released since the weekend, weighed on investors' sentiment and benefitted the precious metal's safe-haven status.