FSMNews

The dollar edged higher on Wednesday as the US-China trade conflict drove safe-haven demand for the currency, but news about Canada being ready to make a concession to the US to settle negotiations over revising the North American Free Trade Agreement (NAFTA) weighed on the USD/CAD pair.

The US dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.09 percent to $95.14.

The dollar fell 0.1 percent to 111.53 against safe-haven yen. Senior analyst Kumiko Ishikawa stated that the pair climbed yesterday, but those gains are gradually coming off as there is not a lot of appetite to take risk.    

An index for emerging market currencies was moving near a 16-month low hit during earlier trading session.

Tokyo branch manager at a financial firm Bart Wakabayashi said it cannot be denied that emerging markets have fallen and that has weighed on sentiment, and that has probably pushed a lot of flows to the US and the dollar.

All of this emerging market turmoil on top of all this trade uncertainty has really driven participants into the dollar and again, to some extent, the yen, Wakabayashi added.

US-China Trade War

FSMNews

Investors are keeping a close eye on the US-China trade conflict amid fears that an escalation could be approaching.

China’s offshore yuan advanced 0.03 percent to 6.8773 per dollar after marking a 2-1/2 week low of 6.8888.

China plans to ask the World Trade Organization next week to consent to imposing sanctions on the US for Washington’s non-compliance with a ruling in a dispute over US dumping duties.

The move came after US President Donald Trump announced on Friday that he was prepared to levy duties on $267 billion worth of Chinese imports, on top of planned tariffs on $200 billion of Chinese goods.

The Australian dollar, which is considered as a proxy for global expansion because of the nation’s huge trade exposure to China, dropped 0.6 percent to 0.7116.

The currency traded close to a 2-1/2 year low of 0.7085 on Tuesday amid worries over Australia’s exporters potentially facing difficulty from any harm to the Chinese economy from a trade war.      

Canada Ready to Make Dairy Concessions for NAFTA

FSMNews

The greenback was in the red against its Canadian counterpart, after news about Canada agreeing to grant the US access to its dairy market surfaced.

Two Canadian sources familiar with the matter stated that Canada was ready to offer the US limited access to its protected dairy sector as a concession to finally establish a new NAFTA.

The currency was down 0.1 percent to 1.3050 against the Canadian dollar which added almost three-fourths of a percent in the session, following the trade talk news.

Canada’s dairy industry is one of three major obstacles in the NAFTA negotiations between the two countries, along with a measure for resolving trade disputes and cultural protections for Canadian media companies.     

US President Donald Trump said negotiations with Canada were going well and it wants to make an agreement. Canadian Foreign Minister Chrystia Freeland returned to Washington on Tuesday to join talks regarding rescuing NAFTA ahead of the October 1 deadline.

Know more about the latest market events here at FSMNews.  Subscribe now to FSMNews to get round the clock information about forex, commodities, stocks, technology, economy and a lot more.