Following the release of strong economic data, the USD managed to stay little changed in early Asian trading today. 

By 4:45am GMT, the US dollar Index last traded at 98.250, down 0.04%. 

According to the data released this week, the US economy grew at a 2.1% annualised rate. However, the data was in contrast to other indicators showing an overall global economic slowdown. 

Elsewhere, durable goods gained by 0.6% after dropping 1.4% in the month before.

The ongoing US-China trade situation has remained in focus as investors grow hungrier for evidence of progress on a deal, with the next round of American tariffs on Chinese goods due December 15th.

Additional tension also continues to build over Hong Kong. China’s foreign ministry warned again of any unspecified retaliation for US President Donald Trump’s signing of legislation that shows support towards protesters.

Trump approved two bills that back Hong Kong’s anti-government protestors, and while China has vowed to retaliate, no action has yet been taken and it’s unclear if that will have any bearing on trade talks.

David Riley, chief investment strategist at BlueBay Asset Management, told Bloomberg TV:

Markets are on a sort of ‘wait and hold’ in terms of that phase-one trade deal. If there is a skinny deal, that will allow markets and risk assets to grind higher even if there is no real prospect of phase two or subsequent detailed negotiation occurring this side of U.S. presidential elections.

The US equities and bond markets were closed while the nation enjoyed the Thanksgiving holiday. 

Meanwhile, Futures on the S&P 500 Index dipped 0.2%, while the Stoxx Europe 600 Index dropped by 0.1%.

As for currencies, GBP briefly touched near seven-month highs against the euro yesterday on a poll predicting a majority election for the Tories, but then fell to end the trading day marginally lower. Today, the cable fell 0.1% to $1.2896.

Against the dollar, the pair was near flat today as UK PM Boris Johnson’s Tory Party has firmed in opinion polls ahead of the December 12th election.

USDJPY fell by 0.1% at 109.45 as falling Chinese and Hong Kong stocks sent the yen up. EURUSD rose by 0.1% to 1.1011, while AUDUSD & NZDUSD gained 0.1% and 0.4% respectively. 

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Dalia Hilmi

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