A pedestrian walks past an electronic stock quotation board in Tokyo.

Kazuhiro Nogi | AFP | Getty Images

“US-China trade tensions will continue to drive currencies this week,” currency strategists at the Commonwealth Bank of Australia wrote in a morning note. They said the dollar could “edge higher this week,” driven by trade developments and it could potentially diminish expectations for further rate cuts from the U.S. Federal Reserve.

The dollar last traded at 98.353 against a basket of its peers on Friday.

Elsewhere, the Japanese yen changed hands at 109.21 per dollar, weakening from levels below 108.8 that was briefly reached last week. The Australian dollar traded at $0.6857, declining from around $0.6900 from the previous week.

Citi analysts said in a note that they expect at most a “rollback of the September tariffs only along with a suspension of the December tariffs contingent on achieving a Phase 1 deal.” The next tariff deadline is Dec. 15.

“We expect a high degree of uncertainty to remain even if a tariff rollback is achieved,” the analysts wrote, explaining that investment and financial frictions between the world’s two largest economies are likely to continue.



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