Equities and dollars take heart from trade developments as safe-haven gold stumbles

Stocks fall but hold near highs after signs of a thaw in the US and China trade war

US stocks traded near record highs on Tuesday November 19, while the dollar reversed earlier losses as investors took heart from signs of a thaw in the trade dispute between the US and China. This left gold and safe-haven currencies such as the Swiss franc on the backfoot.

Wall Street shares traded modestly lower on the day, with retailer stocks leading the move after a series of downbeat earnings reports from the likes of 0'>Home Depot and Kohl’s. The 0'>S&P 500 was last down 0.1 per cent at 3,120.15 points, having opened at a record 3,127.45 points.

Major indices still traded just shy of record levels after an announcement late on Monday November 18 by the US government that it would concede a new 90-day extension that would allow US companies to carry on doing business with Chinese telecoms provider Huwaei Technologies.

The dollar pared earlier losses and rallied, after three straight days of declines, which in turn put gold, oil and industrial metals under pressure.

European stocks mostly rose, having earlier reached their highest since mid-2015, led by the auto sector after data showed passenger car registrations in Europe rose in October to their highest since 2009, according to Reuters.

The 0'>FTSE closed up 0.22 per cent at 7,323.80 points, while Germany’s 0'>DAX, which is heavily influenced by shares in major car companies such as 0'>Volkswagen and 0'>BMW, closed 0.1 per cent up at 13,220.41 points.

On the FX markets, investor focus shifted to the minutes of the Federal Reserve’s most recent policy meeting on Wednesday November 20.

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Perceived safe-havens such as the Swiss 0'>franc racked up the most losses against the dollar from among the major currencies, reflecting some of that greater investor confidence.

The dollar index was last flat at 97.79, having fallen to a session low of 97.75 earlier in the day. Against the Swiss franc, the dollar up 0.1 per cent at 0.991 francs.

With the dollar holding firm against safe-haven assets, gold eased by 0.1 per cent to around $1,470 an ounce.

Ten-year US Treasury yields were broadly unchanged at around 1.81 per cent, in line with a steady session in Europe that saw 10-year Bund yields hold at -0.33 per cent and 10-year UK gilts sit at 0.74 per cent, flat on the day.

The 0'>crude oil price slid for a second day, falling by more than 1 per cent below $62 a barrel, in spite of the greater confidence in the progress of US negotiations with China, largely as commodity investors remained wary of extra supply at a time when demand is restricted by a slower global economy.

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