Home »Money and Banking » World » Early trade in New York: Dollar little changed as trade, data in focus
The US dollar index was flat on Tuesday as investors focused on the US-China trade war and economic data for signals of growth and whether the US Federal Reserve is likely to cut rates in the coming months. Risk sentiment improved on Monday, after the United States reached a deal with Mexico on Friday to avoid imposing tariffs on the country.

Ongoing tensions between the US and China and the prospect that US President Trump will look to impose tariffs on Japan and Europe, however, continues to weigh on risk sentiment. Investors are concerned that trade wars are harming global growth, and increasing the likelihood that the US central bank will need to cut rates to stimulate growth.

Data on Tuesday showed that US producer prices rose for a second straight month in May, though price pressures remained tepid. "It certainly plays into the dovish Fed story," said Win Thin global, head of currency strategy at Brown Brothers Harriman in New York.

Consumer Price Index data on Wednesday, which is closely watched by the Federal Reserve, is the next inflation indicator. Retail sales on Friday will also be closely watched for indication on whether tariffs are slowing the economy. "We know we are in a low inflation environment right now, but the question is what is the US story in terms of growth," said Thin. This month's G20 summit will help push US-China trade talks forward but no final agreement was expected to be reached there, US Commerce Secretary Wilbur Ross said on Tuesday.

Copyright Reuters, 2019


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