Dollar rises for second day as US, Canada end talks with no deal

The dollar index versus a basket of six major peers added 0.1 per cent to 93.335 after rallying to 93.457 overnight, its highest since December 22. ― Reuters pic
The dollar index versus a basket of six major peers added 0.1 per cent to 93.335 after rallying to 93.457 overnight, its highest since December 22. ― Reuters pic

NEW YORK, Sept 1 — The dollar climbed for a second straight session yesterday as investors sought the safety of the US currency after reports that the United States and Canada ended trade negotiations without any deal.

The greenback is on track to end the month of August on a positive note, up about 0.6 per cent amid trade tensions. It has advanced in four of the last five months, gaining nearly 9 per cent in that period.

“The trade-positive news in the beginning of the week with the US-Mexico deal has turned, and has become trade-negative,” said Alfonso Esparza, currency strategist at OANDA in Toronto. “Now we’re seeing resistance on the Canada front with respect to Nafta.

Negotiations have concluded, but nothing has been decided so there’s a little bit of uncertainty. That has created a risk-averse environment, which has benefited the dollar.”

US and Canadian officials yesterday concluded a round of talks on the North American Free Trade Agreement, a Canadian official said. The Canadian government will later in the afternoon announce the results of the talks.

The Journal reported that US President Donald Trump will tell Congress of plans to proceed with just the US-Mexico trade deal.

Trump said yesterday that Canada had taken advantage of the United States on trade, as talks between the two countries, which are seeking to revamp the North American Free Trade Agreement, soured sharply.

“I love Canada, but they’ve taken advantage of our country for many years,” Trump said during a speech in North Carolina. Concerns about a Nafta deal with Canada grew after Canadian Foreign Minister Chrystia Freeland said earlier yesterday that Canada is looking for a “good deal, not just any deal.”

But Trump said any trade deal with Canada would be “totally on our terms,” confirming an earlier report from the Toronto Star.

Trump’s remarks ignited more dollar buying.

In late afternoon trading, the dollar index was up 0.4 per cent at 95.106.

The Canadian dollar fell 0.7 per cent versus the at 76.49 US cents.

The greenback had rallied late on Thursday in a safe-haven move after Bloomberg News reported that Trump wanted to move ahead on a plan to impose tariffs on imports worth US$200 billion (RM823.4 billion) next week.

The euro was also hit by Trump’s comments saying that the European Union’s proposal to eliminate auto tariffs was “not good enough.” Investors were fearful about Europe’s outlook as Trump has threatened to impose tariffs on cars assembled by German automakers.

The single currency was last down 0.6 per cent at US$1.1601 , after losing about 0.3 per cent overnight, pressured by a rise in Italian government yields.

Emerging market currencies fell. The Argentinian peso , the world’s worst-performing currency this year, was down about 1 per cent against the dollar, which last traded at 38.00 pesos. On Thursday, the Argentine peso tumbled 10 per cent, bringing month-to-date losses to 27 per cent.

Argentina’s voted unanimously at an emergency meeting on Thursday to raise its benchmark rate to 60 per cent from 45 per cent. — Reuters

Source: The Malay Mail Online

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