November 12, 2019 / 1:46 AM / 9 months ago

Dollar stalls after Trump speech reveals little on trade

(Reuters) - The dollar was little changed after U.S. President Donald Trump in a speech on Tuesday offered no new details on the state of the administration’s trade war with China.

FILE PHOTO: U.S. 100 dollar, 50 euro, 20 pound and Ukrainian 500 hryvnia banknotes are seen in this picture illustration taken in Kiev, Ukraine, October 31, 2016. REUTERS/Valentyn Ogirenko/Illustration

The dollar index .DXY held onto modest gains made earlier on Tuesday, but was last trading at 98.310 against a basket of six currencies, up 0.11% on the day, and a hair above 98.304, its level at noon when Trump’s remarks began.

Speaking at The Economic Club of New York, Trump instead took aim once again at the Federal Reserve, bemoaning the fact that the United States has higher interest rates than other developed economies.

“Give me some of that. Give me some of that money. I want some of that money. Our Federal Reserve doesn’t let us do it.”

The speech was highly anticipated by the foreign exchange market, which has moved with trade headlines. The paucity of details on trade in itself was seen by some as a pessimistic signal.

“I don’t think we’ve learned anything new from Trump’s speech. The only thing that’s maybe new is that he did not announce a date and a time for a signing ceremony. Where markets had been hoping for that, those hopes were dashed,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets.

“We had a little bit of a fade in risky assets when he started talking and it was confirmed that he was not about to announce phase one.”

The S&P 500 index .SPX fell as Trump spoke, though remained positive on the day. The Dow .DJI and Nasdaq .IXIC indexes had also fallen. Some of that risk-off sentiment was seen boosting safe-haven assets modestly. The dollar was 0.08% weaker against the Japanese yen JPY= and 0.09% lower versus the Swiss franc CHF=.

The dollar was lifted last week when comments from the Chinese trade ministry were interpreted as a sign of progress on rolling back China-U.S. tariffs, causing traders to dump safe-haven currencies like the yen. However, uncertainty hit again on Friday when Trump said that he had not agreed to reduce tariffs.

The offshore Chinese yuan was weaker against the dollar at 7.018, down 0.17%. The threshold of 7 yuan per dollar was crossed for the first time in August CNH=. The yuan had also weakened earlier Tuesday on political unrest in Hong Kong and after weak economic data in mainland China.

Reporting by Kate Duguid and Elizabeth Howcroft; editing by Jonathan Oatis

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