US Dollar Falls As Political Turmoil, Geopolitics Drive Trade

The US dollar is sliding against many major currency rivals on Tuesday as domestic political turmoil and geopolitics are dominating the latter part of the trading session. In addition to President Donald Trump stating that he will not accept a bad trade agreement with China, news broke that House Speaker Nancy Pelosi plans to launch an impeachment inquiry to oust Trump from the White House before next year’s election.

Speaking to reporters at the United Nations General Assembly, President Trump reiterated that he would not accept a trade deal with Beijing if it is bad for the world’s largest economy. He noted that high-level talks next month will concentrate on intellectual property theft and currency manipulation.
His remarks came shortly after Treasury Secretary Steven Mnuchin confirmed US-China trade negotiations would resume in two weeks in Washington. He added that the deputy-level talks between both sides had experienced modest progress, which might surprise analysts considering that Chinese officials had canceled planned visits to American farms.
China reportedly issued waivers to many domestic and state-owned firms to import American soybeans, which came as the US government reported that Beijing purchased 600,000 tonnes of the agricultural good. This was good news for American farmers who have been battered over the last 18 months.
Meanwhile, on Tuesday afternoon, a bombshell dropped that Speaker of the House Nancy Pelosi will soon be announcing that she is directing an impeachment inquiry into President Trump. The justification is that Trump withheld financial assistance to Ukraine unless the European country initiated an investigation into former Vice President Joe Biden and his involvement in firing a Ukrainian prosecutor that would have probed a company that employed his son.
Trump dismissed the inquiry as â€œridiculous” and a â€œwitch hunt.” The president plans to publicly release a non-redacted transcript of his call with his Ukrainian counterpart, Volodymyr Zelensky.
On the data front, the IHS Markit manufacturing purchasing managers’ index (PMI) flash reading for September was 51.0, down from 50.3 in August. The Chicago Federal Reserve Bank National Activity Index advanced from -0.41% in July to 0.1% in August.
The US Dollar Index slumped 0.27% to 98.34, from an opening of 98.64.
The USD/CAD currency pair tumbled 0.17% to 1.3242, from an opening of 1.3270, at 20:07 GMT on Tuesday. The EUR/USD climbed 0.25% to 1.1022, from an opening of 1.0994.

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