By Anneken Tappe, MarketWatch
The U.S. dollar gave back some brief gains on Monday as its rivals remained strong on the back of optimism over U.S.-China trade relations.
Global stocks also strengthened on upbeat tariff progress, with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.93% and S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.93% both trading higher.
President Donald Trump tweeted on Sunday the March 1 deadline for wrapping up trade talks with Beijing would be extended after last week hinting at this possibility. The delay was perceived as an indication that a deal might be near.
”An extension of the tariff freeze that was supposed to end on March 1 was widely expected but the confirmation late yesterday one of the most important developments. It is not clear how long the extension will be, though it will obviously be sufficient to cover the Trump-Xi meeting, which could be a month away,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.13% was last down 0.1% at 96.391.
In economic data, the Chicago Fed national activity index for January contracted by 0.43, while wholesale inventories for December improved 1.1%.
In the week ahead, investors will be watching for February consumer confidence due Tuesday, gross domestic product estimates on Thursday and December core inflation on Friday. The MarketWatch consensus for GDP growth is 2% in the final three months of the year, down from 3.4% in the third quarter. Federal Reserve Chairman Jerome Powell will also give his semiannual testimony before Congress this week.
European currencies were in the green but gave back some of their earlier strength, with the euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0249% fetching $1.1366, compared with $1.1335 late Friday.
The British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0789% was stronger at $1.3109, versus $1.3055, popping higher after the U.K.’s Labour Party said it would support or bring a proposal for a second Brexit referendum.
Sterling traders are gearing up for more drama this week as the British Parliament is expected to vote on a potential Brexit delay on Wednesday. Over the weekend, Prime Minister Theresa May pledged that she would give lawmakers a chance to vote on her Brexit deal on March 12, just 17 days before the U.K. is scheduled to leave the European Union.
Elsewhere, the dollar was rising against the Japanese yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0139% on Monday, buying ¥111.07, up 0.4% at its highest level since late December, according to FactSet data.
Despite the buck gaining momentum, many emerging-market currencies defended their gains. The South African rand /zigman2/quotes/210561940/realtime/sampled USDZAR -0.3676% was among the strongest performers, with one dollar buying 13.8196 rand, down 1.3%.