U.S. Dollar Edges Up as Trade Optimism Fades; All Eyes on Fed Meeting
The U.S. dollar edged up on Wednesday in Asia as Sino-U.S. trade optimism faded following reports that U.S. officials are concerned Beijing might refuse to accept U.S. demands in trade talks.
The U.S. dollar index that measures the greenback against a basket of other currencies edged up 0.1% to 95.920 by 12:23 AM ET (04:23 GMT).
Some U.S. officials fear that China is reneging on certain trade concessions, Bloomberg News reported Tuesday afternoon.
Other reports said Beijing could walk away from talks amid growing mistrust the U.S. will not lift its tariffs imposed last year on Chinese exports to the United States.
The news came after the Chinese state-owned Xinhua news agency reported last Friday that the two sides are moving closer toward a deal.
Meanwhile, traders are closely monitoring the Federal Reserve policy meeting that is due later in the day.
With many market participants betting on an unchanged interest rate decision from the Federal Reserve, the central bank's summary of economic projections are expected to garner the bulk of attention. Traders will also likely focus on whether the central bank would affirm its commitment to “patient” monetary policy.
The GBP/USD pair slipped 0.1% after Michel Barnier, the EU’s chief Brexit negotiator, warned U.K. Prime Minister Theresa May that the bloc would only favour agreeing to a long extension in return for the UK offering “something new."
May is expected to request an extension for Brexit to avoid the U.K. leaving the bloc without a deal on March 29.
On Tuesday, John Bercow, the U.K. House of Commons Speaker, said he would not allow the government to present May’s EU withdrawal agreement to the House again unless it changes substantially.
The USD/JPY pair rose 0.2% to 111.59, while the AUD/USD pair slid 0.2% to 0.7074.
The USD/CNY pair edged up 0.1% to 6.7131.