By Peter Nurse
Investing.com – The dollar rises on Tuesday, awaiting the release of key retail sales data, while the Chinese yuan benefits from the generally friendly dialogue between the presidents of the United States and China during a virtual meeting.
At 8:55 am (CET), the, which tracks the currency’s performance against a basket of six other major currencies, rose 0.1% to 95.468, near new 16-month highs.
The pair fell 0.1% to 6.3777, just above the five-month lows recorded earlier in the day, after the virtual meeting between the president of the United States, Joe Biden, and his Chinese counterpart Xi Jinping will be held relatively smoothly, albeit without any overlapping news.
The leaders of the two largest economies in the world agreed that their countries should increase communication and cooperation, a positive tone that has caused currency markets to consider the possibility of a reduction in trade tariffs in the near future.
In addition, the pair rose 0.3% to 1.3451, following the release of stronger-than-expected UK employment data, increasing the chances that the Bank of England will raise interest rates in December.
British employers added 160,000 net workers to their workforce in October, indicating that the economy has successfully negotiated the end of the government’s work permit scheme to protect employment.
The Bank of England decided not to raise interest rates at its last meeting as it wants to see how the overall economy holds up after the end of its employment support package, but these figures should help the central bank focus on fight inflation.
Continuing with economic data, US retail sales data for October will be released later this day. They will be closely monitored to see if consumer demand remains strong, even in the face of high inflation levels, so that more pressure can be put on the Federal Reserve to act against rising prices.
On the other hand, the pair points a rise of 0.1% to the level of 1.1375, rebounding a bit after registering lows of 16 months as the European region has been affected once again by a new wave of Covid-19 cases.
Countries such as Austria and the Netherlands have already implemented partial containment measures, and other countries are studying the possibility of adopting such measures in the run-up to Christmas and winter.
The president of the European Central Bank, Christine Lagarde, insisted on Monday in her appearance before the European Parliament that the central bank would not rush to raise interest rates, and this prudent stance is also weighing on the single currency.
The pair rose 0.1% to 114.25, while the pair fell 0.1% to 0.7339 after Reserve Bank of Australia Chairman Philip Lowe again rejected the idea of raising interest rates this very 2022.