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Trade data lifts US dollar, stocks flat on mixed earnings

The safe-haven US dollar touched to a two-week high yesterday after data showed a record Chinese trade surplus, while Wall Street stocks were little changed on mixed bank earnings and gains in industrials.

Stocks in Europe edged higher.

Gold slipped to seven-month lows on the firmer dollar and remarks on Thursday from United States Treasury Secretary Steven Mnuchin, who said that the United States and China might reopen trade talks, briefly easing concerns about an escalating trade dispute between the two countries.

“Despite the ominous headlines about a trade war with China, we’re comfortable with US equities at current prices amid favourable macro trends and surging earnings growth,” said Mike Bailey, Director of Research at FBB Capital Partners in Maryland.

The Dow Jones Industrial Average rose 86.11 points, or 0.35 per cent, to 25,011, the S&P 500 gained 4.59 points, or 0.16 per cent, to 2,802.88 and the Nasdaq Composite added 16.66 points, or 0.21 per cent, to 7,840.57.

Mixed corporate results from the three big Wall Street banks put some of this week’s earnings optimism in check.

The greenback got a boost from data showing China’s trade surplus with the US swelled to a record in June, which could further inflame a trade dispute with Washington. Upbeat comments on the US economy from Federal Reserve Chairman Jerome Powell also stoked demand for the dollar, analysts said. Against a basket of major currencies, the dollar index rose 0.05 per cent.

Spot gold dropped 0.4 per cent to $1,241.92 an ounce.

While China has vowed to retaliate against the proposed new US tariffs – 10 per cent on $200 billion of Chinese goods – the lack of a specific response to date has sparked global relief.

Shanghai’s stock index edged lower and China’s yuan headed for its fifth straight week of losses. The yield curve on US Treasuries once again reached its flattest level in 11 years in low-volume trading.

In commodity markets, oil prices had a wild week of price swings, with both the main benchmarks at one point suffering heavy losses as traders focused on the return of Libyan oil to the market.

Even so, oil rose yesterday.

US crude rose 0.58 per cent to $70.74 per barrel and Brent was last at $75.21, up 1.02 per cent on the day.

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