By Geoffrey Smith
Investing.com -- The dollar was little changed against other major currencies in early trading in Europe on Tuesday, while the pound continued to give ground amid growing expectations of an interest rate cut from the Bank of England at the end of the month.
By 3 AM ET (0800 GMT), the dollar index, which tracks the greenback against a basked of developed market currencies, was up less than 0.1% at 97.095, consolidating gains of around 1% since the start of the year.
The euro was up 0.1% at $1.1147, while Sterling bounced slightly after testing but failing to break through Monday’s lows. It was down 0.1% at $1.2978, and at 1.1648 euros.
The Chinese yuan also ground higher after the U.S. removed it from its list of currency manipulators, an apparent goodwill gesture ahead of the signing of the two countries’ partial truce in trade relations on Wednesday. It rose as high as 6.8669 before retracing slightly.
"China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability," Treasury Secretary Steven Mnuchin said in a statement.
Politico reported that the so-called Phase-1 deal will include enforceable commitments from China to buy over $200 billion of U.S. goods across four sectors (energy, agriculture, manufactured goods and services) over a two-year period.
Earlier, Chinese trade data showed imports bouncing well above expectations in December, a data point that would normally support European assets. Exports also rose, more than expected, boosting hopes that the worst of its economic slowdown is now over.
An otherwise quiet day for data is punctuated at 8:30 AM ET by December’s U.S. consumer price figures.