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Dollar Trading Mixed After G20 Agreement

The dollar is turning in a mixed performance against its major rivals Monday afternoon. President Trump and Chinese President Xi Jinping agreed to a 90-day truce in the escalating trade war between the two countries over the weekend. The news sparked a rally in global equities, but has had less of an impact on the currency market.

A White House statement said Trump agreed not to raise the tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent on January 1st as planned.

In return, China agreed to purchase a "not yet agreed upon, but very substantial, amount" of agricultural, energy, industrial, and other product from the U.S.

The White House said the U.S. and China will use the next 90 days to attempt to reach an agreement on issues such as forced technology transfer, intellectual property protection, and non-tariff barriers.

Manufacturing activity in the U.S. unexpectedly grew at a faster rate in the month of November, according to a report released by the Institute for Supply Management on Monday.

The ISM said its purchasing managers index climbed to 59.3 in November after falling to 57.7 in October, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to edge down to 57.5.

With a drop in spending on private construction more than offsetting an increase in spending on public construction, the Commerce Department released a report on Monday showing an unexpected dip in U.S. construction spending in the month of October.

The Commerce Department said construction spending edged down by 0.1 percent to an annual rate of $1.309 trillion in October after slipping by 0.1 percent to a downwardly revised rate of $1.311 trillion in September.

The modest decrease came as surprise to economists, who had expected construction spending to rise by 0.3 percent compared to the nearly unchanged reading originally reported for the previous month.

The dollar dropped to a low of $1.1379 against the Euro Monday, but has since bounced back to around $1.1345.

Eurozone's manufacturing growth slowed less-than-expected in November, amid marginal growth in output and weak business confidence, and was the lowest since August 2016, final data from IHS Markit showed on Monday.

The manufacturing purchasing managers' index fell to 51.8 from 52 in October. The flash reading was 51.5.

The buck climbed to a high of $1.2698 against the pound sterling Monday, but has since eased back to around $1.2725.

UK manufacturing growth improved in November, but activity remained subdued amid a second consecutive month of decline in export orders, though domestic demand increased as Brexit worries prompted clients to stock up on supplies.

The CIPS manufacturing purchasing managers index rose to 53.1 from October's 27-month low of 51.1, survey data from IHS Markit showed on Monday. Economists had forecast a score of 51.7.

The greenback has risen to around Y113.650 against the Japanese Yen Monday afternoon, from an early low of Y113.374.

The manufacturing sector in Japan continued to expand in November, albeit at a slower pace, the latest survey from Nikkei revealed with a manufacturing PMI score of 52.2. That's down from 52.9 in October, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Capital spending in Japan was up 4.5 percent on quarter in the third quarter of 2018, the Ministry of Finance said on Monday - shy of expectations for an increase of 8.5 percent and down from 12.8 percent in the three months prior. Excluding software, capex added just 2.5 percent - well shy of forecasts for 10.7 percent and down from 14.0 percent in Q2.

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