The euro enjoyed a small respite on Monday, jumping to an 11-day high versus the US dollar, on expectations that Washington and Beijing can soon sign off on a deal to end a trade war that has been dragging on global economic growth.
The export-oriented European economy has suffered from the 16 month-long trade dispute between the world’s two largest economies. The tariff war has taken a toll on the world’s manufacturing. Investors injected $3 billion of inflows into European equities over the past two weeks, ending a record run of 85 weeks of persistent outflows, EPFR data showed last week.
“Market participants remain optimistic that a partial US-China trade deal will be signed soon and have welcomed tentative signs of economic improvement outside of the US, especially in the euro zone, both of which are eroding the relative appeal of the US dollar,” said Lee Hardman, currency analyst at MUFG.
The euro was last up 0.1% at $1.1068, its highest since Nov. 7, and the index which tracks the greenback against six major currencies was down 0.1% at 97.90. The offshore Chinese yuan, however, remained below 7 per dollar, last falling 0.1% to 7.0142. The yuan is the most sensitive currency to the trade dispute.
The liveliest mover, according to cnbc.com, was the pound, creeping up 0.3% against the dollar to $1.2945 and against the euro to 85.41 pence. It has surged to a 17-day high versus the dollar and a six-month high versus the common currency.