By Olga Cotaga
LONDON (Reuters) – The euro held steady against the U.S. dollar on Monday after matching a four-week low earlier as the greenback maintained its gains on optimism that the United States and China would roll back tariffs that have hurt global growth.
Officials from both countries said late last week that a rollback of some tit-for-tat tariffs had been agreed as part of a preliminary deal, that has still to be finalised, aimed at ending their trade war.
Even though that was subsequently denied by U.S. President Donald Trump on Friday, he did not completely rule out a deal and U.S. benchmark Treasuries held above a key support level at 1.9%, buoying the currency. [US/N]
Moves were slight as traders kept a wary eye on further news on the U.S.-China trade war, and against the safe-haven Japanese yen the dollar fell as market participants reacted to the escalating political confrontations in Hong Kong.
“Market participants have become more cautious over the potential positive impact for global growth from a partial U.S.-China trade deal following comments from President Trump,” said Lee Hardman, currency analyst at MUFG.
“Nevertheless, market participants are likely to remain optimistic that the U.S. and China are moving closer to finalizing a partial trade deal by the end of this year,” Hardman said.
The euro traded at $1.1023
The Japanese currency was last up 0.3% at 108.98 against the dollar
The index which tracks the dollar against six major currencies was neutral at 98.317, flirting with a four-week low.
The Chinese yuan weakened 0.3% to 7 per dollar in offshore trade
Disappointing economic data also hurt sentiment toward the yuan, as China’s producer prices fell the most in more than three years in October, National Bureau of Statistics (NBS) data showed on Saturday, while the country’s consumer prices rose at their fastest pace in almost eight years.
Elsewhere, the British pound was up 0.1% at $1.2797
(Reporting by Olga Cotaga)