U.S. Dollar Index Jun '19 (DXM19)
U.S. Dollar Index Futures Market News and Commentary
The dollar index (DXY00) on Monday rose by +0.153 (+0.16%). Dec euro-fx futures (E6Z9) on Monday closed -0.00130 (-0.12%), and EUR/USD (^EURUSD) fell -0.00084 (-0.08%). Dec yen futures (J6Z9) on Monday closed +0.0014 (+0.15%), and USD/JPY (^USDJPY) was little changed. The dollar index on Monday closed mildly higher due to short-covering from last Friday's 3-week low and safe-haven demand tied to the military flare-up in Syria, impending sanctions on Turkey, and doubts about the US/Chinese trade deal and Brexit. EUR/USD was undercut on Monday by Brexit concerns. GBP/USD fell by -0.00859 (-0.68%) on Monday on Brexit concerns. UK Prime Minister Johnson's Brexit proposal is running into problems in Brussels after the EU's chief Brexit negotiator, Michel Barnier, said on Sunday that PM Johnson's Brexit proposal lacks detail and is not yet good enough as the basis for an agreement. Intensive talks are continuing to try to produce an agreement to be considered at the EU Summit this Thursday and Friday. If a Brexit agreement isn't reached by Saturday (Oct 19), the UK Parliament's Benn act requires PM Johnson to request an extension of the current Brexit deadline of Oct 31. Bloomberg reported on Monday that China wants more talks by the end of October to resolve some sticking points before Chinese President Xi will sign last Friday's trade agreement at November's APEC Summit in Santiago, Chile. Bloomberg said that one of its sources also said that China wants President Trump to agree to scrap the December 15 tariff of 15% on $160 billion of Chinese goods as a precondition for a deal, which the U.S. has not yet agreed to do. President Trump has so far agreed to scrap only the hike in the tariff to 30% from 25% on the original $250 billion of Chinese goods that was otherwise due to take effect this Tuesday (Oct 15). In negative data for the Chinese yuan, China on Sunday night reported that Sep imports fell sharply by -8.5% y/y, which was weaker than expectations of -6.0% y/y and Aug's report of -5.6%. Sep exports fell by -3.2% y/y, which was weaker than expectations of -2.8% and Aug's report of -1.0%. The deterioration in China's imports and exports is bearish for the Chinese economy. Despite that negative news, the Chinese yuan on Monday rallied by +0.3% on relief that the U.S. and China last Friday reached enough of a trade understanding to at least defer Tuesday's tariff hike. Monday's Eurozone industrial production report was mixed for the euro. Monday's Eurozone Aug industrial production report of +0.4% m/m was slightly stronger than expectations of +0.3% and offset the -0.4% decline seen in July. However, Aug industrial production fell -2.8% y/y, suggesting a contraction in the Eurozone manufacturing sector.
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