US Dollar Mixed as US-China ‘Lay the Groundwork’ on Tariff Delay

The US dollar is mixed against multiple currency rivals on Tuesday after it was reported that US and China trade negotiators are working on a plan to delay the December 15 tariffs. This comes after the federal government revised its third-quarter productivity numbers slightly higher, though the report still marked a negative reading for the first time in four years. Business confidence is on the rise, however, so can positive data follow suit?

According to The Wall Street Journal, US and China representatives are “laying the groundwork” to delay new tariffs that were originally planned to go into effect on December 15. Citing unnamed officials from both countries, the newspaper reported that Washington and Beijing are squabbling over how to encourage China to commit to immense acquisitions of US agriculture.
Economists have been concerned that the new tariffs, which would target the remaining $156 billion in Chinese goods, would significantly harm American consumers.
US labor productivity in the non-farm business sector tumbled by an annualized rate of 0.2% during the July-to-September period of 2019. This is an improvement from the initial 0.3% decline, but it is substantially down from the unrevised 2.5% growth in the second quarter. For the first time since the fourth quarter of 2015, productivity has contracted.
Researchers also reported that the output of goods and services companies produce was revised upward from 2.1% to 2.3%. The hours worked rose from 2.4% to 2.5%, manufacturing productivity slid 0.1%, and unit-labor costs were revised from 3.6% to 2.5%.
The lingering US-China trade spat is causing exports to weaken and business investment to diminish, which were contributing factors to the disappointing productivity numbers.
Meanwhile, the National Federation of Independent Business (NFIB) Business Optimism Index climbed from 102.4 in October to 104.7 in November. This is the largest month-over-month gain since May. The NFIB’s Uncertainty Index also edged up six points.
The US Dollar Index, which measures the buck against a basket of currencies, tumbled 0.14% to 97.51.
The USD/CAD currency pair dipped 0.05% to 1.3234, from an opening of 1.3239, at 13:24 GMT on Tuesday. The EUR/USD advanced 0.1% to 1.1078, from an opening of 1.1066.

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Original from: www.earnforex.com