Dollar softens as Beijing and Washington sign Phase 1 trade deal

Dollar softens as Beijing and Washington sign Phase 1 trade deal

The U.S. Dollar stood its ground to the riskier Asian currencies on Thursday as a signed Phase 1 trade deal between Beijing and Washington showed optimism for investors. The centerpiece of the deal was a pledge by China to purchase at least an additional $200 billion worth of U.S. farm products and other goods and services over two years.

However, the agreement did not remove tariffs and many analysts expressed skepticism that the purchase targets are realistic.

U.S. Vice President Mike Pence has said that Phase 2 discussions were already under way as negotiators work to resolve differences.

The news helped Australian and New Zealand dollars to book modest gains, while the safe-haven Japanese yen softened slightly.

The NZD/USD pair led gains in major currencies, rising 0.3% to $0.6635, while the AUD/USD tacked on 0.1% to its highest for the week at $0.6919.

The Chinese Yuan headed back toward a six-month peak hit on Tuesday, adding 0.1% to 6.8860 per Dollar in offshore trade.