CURRENCIES: U.S. Dollar Edges Higher As Investors Eye Trade Developments

04/04/19 03:20 PM EDT

By Aaron Hankin

ECB officials discussed more aggressive stimulus at March 6-7 meeting, minutes show

The U.S. dollar traded higher Thursday, carving out gains against its major rivals as investors await further clarity on a potential trade deal between the U.S. and China, while looking ahead to March employment data due on Friday.

The ICE U.S. Dollar Index, a measure of the currency against six of its nearest trading rivals, was trading at 97.303, up 0.2%.

"The broad value of the USD is currently trading up 0.14% towards the end of the London morning," wrote Stephen Gallo, European head of FX Strategy at BMO Capital Markets. "But as far as the impact of fundamentals on the FX space is concerned, today was a day of 'neither rhyme nor reason.' Put differently, there is no fundamental story per se behind USD strength."

The next test for the dollar comes early on Friday with the release of the March employment report. Economists polled by MarketWatch are expecting 179,000 jobs to be added and the unemployment rate to remain steady at 3.8%.

"There are good reasons to expect a rebound. If the numbers come in as anticipated, that would certainly suggest growth continues and that last month's weak report was an outlier," wrote Brad McMillan, CIO of Commonwealth Financial Network.

In trade news, The Wall Street Journal reported that the White House may announce plans for a summit between President Donald Trump and China's President Xi Jinping, signaling that talks may be nearing a conclusion.

"The key news of course is that the U.S. and China are getting closer to a deal (luckily we haven't heard this before). Trump's economic adviser Larry Kudlow noted yesterday that the talks were 'making good headway,' but he also warned that 'hey are not there [yet].' Trump is said to meet with China's envoy Liu He today," wrote Elwin de Groot, head of macro strategy at Rabobank.

Read:Trump 'likely' to announce summit plans at meeting with China's vice premier (http://www.marketwatch.com/story/trump-likely-to-announce-summit-plans-at-meeting-with-chinas-vice-premier-2019-04-04)

The British pound is set to end its three-day win streak, trading at $1.3072, compared with $1.3160 late Wednesday. On Friday, more talks are expected to take place between the Labour Party and the government.

The euro was last changing hands at $1.1215, versus $1.1233 late Wednesday. The common currency ticked lower after the release of the minutes of the ECB's March 6-7 meeting that showed policy makers discussed more aggressive stimulus to support the flailing European economy.

Read:ECB debated more aggressive stimulus in March (http://www.marketwatch.com/story/ecb-debated-more-aggressive-stimulus-in-march-2019-04-04)

With U.S. equities trading mixed in Thursday afternoon trade, the Japanese yen -- a bellwether for risk appetite -- was little changed at Yen111.54 compared with Yen111.49.

The Dow Jones Industrial Average was up 0.5%, the S&P 500 was mostly unchanged, while the Nasdaq Composite was off 0.2%.

In emerging markets, the Indian rupee fell around 1% versus the dollar after the central bank cut its key policy rate by 25 basis points to 6% from 6.25%. The central bank said global activity has been "losing pace."

Read:Reserve Bank of India cuts rates, citing 'sluggish' domestic growth, global headwinds (http://www.marketwatch.com/story/reserve-bank-of-india-cuts-rates-citing-sluggish-domestic-growth-global-headwinds-2019-04-04)

In economic news, jobless claims fell by 10,000 to 202,000, (http://www.marketwatch.com/story/jobless-claims-touch-lowest-level-since-1969-falling-to-202000-at-the-end-of-march-2019-04-04) the lowest level since 1969.

Read:Buy dollars even if stocks keep rising, says Goldman alumnus who predicted the financial crisis (http://www.marketwatch.com/story/buy-dollars-even-if-stocks-keep-rising-says-goldman-alumnus-who-predicted-the-financial-crisis-2019-04-04)

 

(END) Dow Jones Newswires

April 04, 2019 15:20 ET (19:20 GMT)

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