The U.S. dollar kicked off a short U.S. trading week in muted fashion while traditional havens gained, as Chinese economic data released over the long Martin Luther King Jr. Day holiday weekend confirmed worries about a slowing engine of global growth.
Risk sentiment took a hit as the data showed the world’s No. 2 economy grew at its lowest pace in decades last year at 6.6%. According to a report from Chinese state news agency Xinhua, President Xi Jinping has warned officials to be wary of a slowing economy and to take action.
In response to the data, President Donald Trump tweeted that China’s economic slowdown was due to trade tensions with the U.S. and that Beijing should “finally do a Real Deal, and stop playing around.”
Traders are also paying attention to the World Economic Forum in Davos taking place throughout the week.
While major currencies were rather range-bound early Tuesday, havens like the Japanese yen USDJPY, -0.21% and Swiss franc USDCHF, +0.0201% were slightly stronger against the U.S. dollar. The greenback last bought ¥109.46, down from ¥109.66 late Monday in New York, and 0.9968 franc, compared with 0.9973 franc.
The Bank of Japan is due for its first monetary policy meeting of the year at 10 p.m. Eastern.
The ICE U.S. Dollar Index DXY, +0.05% tilted into positive territory at 96.375. Last week, the popular dollar gauge posted its first weekly gain since mid-December.
The British pound GBPUSD, +0.0465% remained tied to the latest Brexit developments and was little changed after the U.K.’s unemployment rate dropped to 4%, beating expectations.
Meanwhile, Jeremy Corbyn, the leader of the opposition Labor Party, has backed a plan to give Parliament the vote on whether the U.K. should hold a second referendum. Prime Minister Theresa May has spoken out against that idea.
On Monday, May presented her alternative Brexit deal—after her initial deal was rejected last week—which seemed to include concessions to the pro-European Union side of Parliament. For example, the plan B deal scrapped a registration fee for EU residents in the U.K. Parliament is set to vote on the deal next week Tuesday, on Jan. 29.
The euro EURUSD, -0.1056% ticked down to $1.1361, down from $1.1367 late Monday. Traders of the shared currency are looking ahead to the first meeting of the year for the European Central Bank on Thursday.
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