- 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
(Adds comment, updates prices in text, table)
The dollar slid to a new four-week low on Tuesday, as the U.S.-Mexico trade deal aimed at overhauling the North American Free Trade Agreement prompted investors to unwind more of their safe-haven bets on the greenback, boosting appetite for higher-risk assets.
The U.S. currency has fallen for three consecutive weeks, and is down nearly 2 percent.
By afternoon trading, however, the greenback had retraced its losses, with the dollar index .DXY down just 0.1 percent on the day at 94.717.
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 the three-country pact.
Against the Canadian dollar, the greenback fell 0.2 percent to C$1.2930 CAD= . The U.S. dollar recovered ground against the yen, trading up 0.1 percent at 111.23 yen JPY= .
"Admittedly, signs that the U.S. administration is willing to negotiate and accept a compromise on trade will presumably be welcomed in China and Europe," said Oliver Jones, market economist, at Capital Economics in London.
But he added that there are reasons to be cautious about the trade deal, noting that the new agreement is still "more protectionist than the NAFTA status quo."
The greenback also pared losses after the U.S. consumer confidence index came in higher than expected.
The dollar had also been stung by comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole, Wyoming conference this past week that seemed to suggest a slower pace of U.S. interest rate increases.
He said the Fed will continue to raise interest rates, but noted that the U.S. central bank 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 Fed under Powell - his own appointee - for raising interest rates.
Further adding to overall risk appetite was news that China's central bank allowed its currency to strengthen against the dollar via its daily fixings.
The euro EUR= , meanwhile, rose 0.2 percent to $1.1694, 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 3:37PM (1937 GMT)Description RIC Last U.S. Pct YTD High Bid Low Bid Close Change Pct Previous Change Session Euro/Dollar EUR= $1.1690 $1.1677 +0.11 -2.56 +1.1733 +1.1663 Dollar/Yen JPY= 111.2300 111.0800 +0.14 -1.28 +111.3500 +110.9600 Euro/Yen EURJPY= 130.05 129.70 +0.27 -3.79 +130.2700 +129.6600Dollar/Swiss CHF= 0.9765 0.9795 -0.31 +0.23 +0.9809 +0.9746 Sterling/Dollar GBP= 1.2866 1.2891 -0.19 -4.78 +1.2931 +1.2862Dollar/Canadian CAD= 1.2931 1.2963 -0.25 +2.81 +1.2981 +1.2887 Australian/Doll AUD= 0.7333 0.7350 -0.23 -6.00 +0.7362 +0.7322 ar Euro/Swiss EURCHF= 1.1419 1.1439 -0.17 -2.29 +1.1453 +1.1419 Euro/Sterling EURGBP= 0.9086 0.9060 +0.29 +2.29 +0.9099 +0.9053
NZ NZD= 0.6708 0.6694 +0.21 -5.33 +0.6726 +0.6677 Dollar/DollarDollar/Norway NOK= 8.3468 8.3210 +0.31 +1.70 +8.3509 +8.2906 Euro/Norway EURNOK= 9.7588 9.7170 +0.43 -0.91 +9.7780 +9.7119Dollar/Sweden SEK= 9.1333 9.0921 +0.59 +11.36 +9.1541 +9.0850 Euro/Sweden EURSEK= 10.6810 10.6180 +0.59 +8.56 +10.7210 +10.6157<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-World FX rates in 2018: http://tmsnrt.rs/2egbfVh^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
