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Dollar Eases After 8-session Winning Streak

After an eight-session winning streak, the U.S. dollar turned a bit easy on Tuesday as investors looked at riskier assets amid optimism about the outcome of upcoming trade talks between U.S. and Chinese officials.

Somewhat positive developments on border wall funding issue too prompted investors to go for riskier investments.

After preliminary junior level talks between China and the U.S. that began in Beijing on Monday, the much anticipated and more crucial trade negotiations are set to take place over the next couple of days.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have reportedly arrived in Beijing, and are scheduled to hold talks with Chinese Vice Premier Liu He on Thursday and Friday.

Upon arrival in Beijing, Mnuchin is reported to have said, "We're looking forward to several important days of talks."

On border wall front, the U.S. congressional negotiators reached an agreement to avoid new government shutdown and possible finance for the construction of new barriers along the U.S.-Mexico border.

President Donald Trump has commented that he is not pleased with a tentative agreement reached by the lawmakers. Trump, however, stopped short of saying he would reject the plan.

Trump claimed he would still build a "beautiful, big, strong wall" on the U.S. border with Mexico, and noted that he is still studying the details of the deal, which reportedly includes $1.4 billion for physical barriers on the border, well short of his demand for $5.7 billion for a border wall.

The Dollar Index was hovering around 96.70, down 0.4%, but was still near its highest level since December 2018.

Against the Japanese Yen, the greenback gained about 0.1%.

Against the Euro, the dollar weakened to 1.1329, after rising to 1.1259, a three-month high.

Against British Pound Sterling, the greenback eased to 1.2896, after climbing to 1.2833, a three-week high.

Against Swiss Franc, the dollar is trading at 1.0061, after having eased to 1.0036 earlier.

In economic news today, a report from the Commerce Department showed the U.S. trade deficit narrowed by much more than anticipated in the month of November.

The Commerce Department said the trade deficit narrowed to $49.3 billion in November from a revised $55.7 billion in October. Economists had expected the deficit to narrow to $54.0 billion from the $55.5 billion originally reported for the previous month.

According to the data released by the Labor Department today, first-time claims for U.S. unemployment benefits pulled back in the week ended February 2nd after the jump seen in the previous week.

The report said initial jobless claims fell to 234,000, a decrease of 19,000 from the previous week's unrevised level of 253,000. Economists had expected jobless claims to drop to 221,000.

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