The U.S. dollar appreciated against its most major counterparts in the European session on Monday, as heightened tensions between the U.S. and China and continued uncertainty over a Brexit trade deal dampened risk sentiment.

The U.S. is preparing to sanction at least a dozen more Chinese officials over their role in the recent disqualification of Hong Kong legislators, media reports suggest.

Chinese Foreign Ministry spokeswoman Hua Chunying said that Beijing would take countermeasures should the U.S. continue down the “wrong path.”

Traders have started pricing in the prospect of a ‘no deal’ outcome to EU-UK trade negotiations after the Sun newspaper reported that Prime Minister Boris Johnson was ready to walk away from negotiations “within hours” amid stubborn differences over fishing rights in U.K. waters, fair competition and ways to solve future disputes.

Johnson will call time on a Brexit-deal if Brussels refuses to budge from their “outrageous” demands, it was said.

Weak U.S. jobs data released last week helped raise expectations of fiscal stimulus being passed before year-end.

The greenback climbed to near a 3-week high of 1.3224 versus the pound from Friday’s closing value of 1.3429. If the dollar continues its uptrend, 1.31 is possibly seen as its next resistance level.

Data from the Lloyds Bank subsidiary Halifax and IHS Markit showed that UK house price growth increased at a faster pace in November.

House prices grew 1.2 percent in November from October, when prices were up 0.3 percent. Economists had forecast prices to climb 0.5 percent.

Continuing its early rally, the greenback firmed to a 4-day high of 104.31 versus the yen. Next key resistance for the currency is seen around the 108.00 mark.

The greenback spiked up to 1.2079 against the euro, registering a 5-day high. The greenback is seen finding resistance around the 1.17 region.

Data from Destatis showed that German industrial output grew more-than-expected in October, driven by the higher production of automobile and capital goods.

Industrial production climbed 3.2 percent month-on-month, faster than the 2.3 percent rise in September. Economists had forecast the monthly growth to ease to 1.6 percent in October.

The greenback moved up against the kiwi and the aussie, reaching near a 2-week high of 0.7006 and a 5-day high of 0.7373, respectively. The currency is poised to target resistance around 0.68 against the kiwi and 0.72 against the aussie.

The greenback approached 1.2833 against the loonie, climbing from a 2-1/2-year low of 1.2773 set at 5:15 pm ET. If the greenback continues its uptrend, 1.33 is possibly seen as its next resistance level.

In contrast, the greenback pulled back to 0.8900 against the franc, from a 4-day high of 0.8947 seen at 4:15 am ET. On the downside, 0.86 is possibly seen as its next support level.

Looking ahead, Canada Ivey PMI for November will be out in the New York session.


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