- U.S.-Mexico deal keeps focus on Canada
- U.S. consumer confidence stronger than expected
- Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
(Recasts, adds comments, FX table, updates prices, changes byline, changes dateline; previous LONDON)
The dollar stuck to a four-week low on Tuesday, as the U.S.-Mexico trade deal reached Monday aimed at overhauling the North American Free Trade Agreement prompted investors to continue unwinding their safe-haven bets on the greenback and boosted appetite for riskier assets.
The U.S. currency has fallen for three straight weeks, down nearly 2 percent.
"The weakness in the buck was the result of relief risk-on flows after the U.S. completed a trade deal with Mexico, indicating that the Trump administration will be willing to negotiate with Canada and Europe as well," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
The United States and Mexico agreed on Monday to overhaul NAFTA, putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of a three-nation pact.
In mid-morning trading, the dollar was down 0.2 percent against a basket of rival currencies .DXY at 94.637, after earlier hitting a four-week trough. Against the Canadian dollar, the greenback fell 0.2 percent to C$1.2928 CAD= .
The dollar last Friday and Monday was stung as well by comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole, Wyoming conference that seemed to suggest a slower pace of U.S. interest rate increases.
He did say the Fed will continue to raise interest rates but he noted that the Fed sees no clear sign of inflation accelerating above 2 percent.
"Jay Powell is sounding like a dove, and I believe it is self-preservation," said John Taylor, president and co-founder of research firm Taylor Global Vision in New York. "There are one or two hikes ahead: we bet it is one in December giving an open track over the election."
U.S. President Donald Trump in an interview with Reuters last week said he was “not thrilled” with the Federal Reserve under his own appointee, Powell, for raising interest rates.
The greenback did pare losses after the U.S. consumer confidence index came in higher than expected.
In addition, the Chinese central bank allowed its currency to strengthen against the dollar via its daily fixings, further boosting risk appetite.
Prior to the market opening, the People's Bank of China (PBOC) raised its daily yuan midpoint by almost 0.7 percent, the most in nearly 15 months.
The euro EUR= , meanwhile, rose 0.2 percent to $1.1708, despite worries Italy's public deficit could exceed the European Union's ceiling of 3 percent of gross domestic product, senior officials said.
======================================================== Currency bid prices at 10:36AM (1436 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1713 $1.1677 +0.31% -2.36% +1.1733 +1.1663 Dollar/Yen JPY= 111.1300 111.0800 +0.05% -1.37% +111.3500 +110.9600 Euro/Yen EURJPY= 130.15 129.70 +0.35% -3.71% +130.2700 +129.6600 Dollar/Swiss CHF= 0.9756 0.9795 -0.40% +0.13% +0.9809 +0.9746 Sterling/Dollar GBP= 1.2882 1.2891 -0.07% -4.66% +1.2931 +1.2862 Dollar/Canadian CAD= 1.2915 1.2963 -0.37% +2.72% +1.2981 +1.2887 Australian/Doll AUD= 0.7345 0.7350 -0.07% -5.85% +0.7362 +0.7322 arEuro/Swiss EURCHF= 1.1429 1.1439 -0.09% -2.22% +1.1453 +1.1419 Euro/Sterling EURGBP= 0.9091 0.9060 +0.34% +2.34% +0.9091 +0.9053 NZ NZD= 0.6709 0.6694 +0.22% -5.32% +0.6721 +0.6677 Dollar/DollarDollar/Norway NOK= 8.3388 8.3210 +0.21% +1.61% +8.3509 +8.2906 Euro/Norway EURNOK= 9.7666 9.7170 +0.51% -0.83% +9.7780 +9.7119 Dollar/Sweden SEK= 9.1408 9.0921 +0.83% +11.45% +9.1541 +9.0850 Euro/Sweden EURSEK= 10.7058 10.6180 +0.83% +8.81% +10.7210 +10.6157
