LONDON (Reuters) – The dollar rose in early London trading on Monday, including the euro and the Swiss franc, with investors targeting fiscal stimulus in the United States and US and China tensions ahead to important trade talks on 15 August.
FILE PHOTO: Four thousand US dollars are counted by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS / Rick Wilking / File Photo / File Photo
After talks in Washington over the next round of fiscal stimulus broke down, U.S. President Donald Trump on Saturday signed executive orders, partially reimbursed improved unemployment benefits to tens of millions of unemployed Americans.
“A little stimulus is just better than not at all,” Commerzbank analyst Thu Lan Nguyen wrote.
“At least that’s what the market looks like, and that’s why the US Dollar is getting stronger,” she added.
Speculators increased their net short dollar positions last week, according to weekly futures data on Friday.
The dollar index was at 93.5 at 0730 GMT, 0.1% up on the day.
The euro fell 0.2% against the dollar, to $ 1.17685, while the safe haven of the Swiss franc also slipped 0.2% to the US currency to 0.914.
The dollar strengthened at the end of last week when tensions between the United States and China escalated, with the US imposing sanctions on top Hong Kong and Chinese officials.
Prominent democracy activist, Hong Kong media tycoon Jimmy Lai, was arrested on Monday under China’s new national security law while US health chief Alex Azar visited Taiwan on Sunday – a trip condemned by China claiming the island as its own.
Senior U.S. and Chinese officials will meet by teleconference on Aug. 15 to review the implementation of their Phase 1 trade sales and likely air border crossings.
Overnight data showed China’s industrial activity in July, which boosted hopes for an economic recovery and boosted early gains in European equities.
The Norwegian krone won against the dollar, up 0.1% at 9.0430.
The New Zealand dollar was down 0.2% against the dollar, at 0.6588.
The Australian dollar plunged 0.1% against the US dollar at 0.71525 after the country recorded a record high increase in COVID-19 stars on Monday. Prime Minister Scott Morrison said closures of internal borders are unlikely to be lifted before Christmas.
The Central Bank of Australia on Friday downgraded its outlook for the national economy and warned unemployment would remain high for several years.
Report by Elizabeth Howcroft; Edited by Kirsten Donovan
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