(Reuters) The dollar fell on Tuesday, ending its longest winning streak in two years, as investors put money in riskier assets on rising hopes of a breakthrough in U.S-China trade talks.
Trump’s top trade negotiator and Treasury secretary arrived in the Chinese capital on Tuesday for high-level talks later in the week as the world’s two largest economies attempt to hammer out a deal to protect American trade secrets and avoid another escalation of U.S. tariffs on Chinese goods.
Some analysts suggested that softer data out of China, including expectations of slowing growth, could help facilitate a deal.
“The economy of China is not booming, so it makes sense that they are willing to sit down with the United States. There is leverage on the side of the United States,” said Juan Perez, senior foreign exchange trader and strategist at Monex, Inc.
Trump expressed displeasure on Tuesday with a deal by congressional negotiators on border security spending that offered no funds for his promised U.S.-Mexican border wall, but did not reject it outright and indicated he did not expect a shutdown.
“With the government shutdown, people without paychecks and unstable trade dynamics all going on, it made sense for the dollar to rally,” said Perez.
“Today is one of those days where we’re getting signals that a lot of these issues can be resolved.”
