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Dollar holds ground as central bank meetings loom, pound jumps

Monday,   09-Dec-2019   03:46 PM (IST)

The dollar held its ground on Monday thanks to last week’s stronger-than-expected jobs data, although worries about U.S./China trade talks kept gains in check, while Britain’s pound jumped on the latest polls ahead of this week’s election. Sterling hit a fresh 2-1/2 year high against the euro after the latest opinion polls showed the governing Conservative Party has extended its lead over rivals ahead of Thursday’s national election. Meanwhile, the dollar stood its ground in the wake of Friday’s jobs data. Attention shifted to U.S. Federal Reserve and European Central Bank policy meetings this week, while a deadline looms for the next wave of U.S. tariffs on Chinese goods to kick in. Top White House economic adviser Larry Kudlow said on Friday that a Dec. 15 deadline is still in place to impose a new round of U.S. tariffs on Chinese consumer goods, but President Donald Trump likes where trade talks with China are going. Europe's single currency traded at $1.1064, after hitting a one-week low of $1.10395 on Friday. The dollar changed hands at 108.52 yen. It had lifted to 108.92 yen on the U.S. jobs data before losing momentum. Analysts said Friday’s jobs numbers was positive for the greenback, bolstering expectations that the Fed would this week continue to signal a pause in its rate-cutting cycle. Data meanwhile showing China’s exports shrank for the fourth consecutive month in November, underscored persistent pressures on manufacturers from the Sino-U.S. trade war. Elsewhere, sterling rallied to a seven-month high at $1.3180 and to a 2-1/2 year peak versus the euro at 83.94 as the latest polls fueled optimism that Thursday's election will end near-term Brexit uncertainty. The ruling Conservative Party extended its lead over the opposition Labour Party to 14 percentage points, up from 9 a week ago, an opinion poll by Survation for ITV’s Good Morning Britain showed on Monday.