| LONDON, April 5
LONDON, April 5 Caution prevailed across major
markets on Wednesday before a potentially tense meeting between
U.S. President Donald Trump and his Chinese counterpart Xi
Jinping later this week, although metals and oil prices firmed
on hope of better global demand.
Market participants will also see the release of minutes
from the last U.S. Federal Reserve meeting in which the central
bank decided to raise interest rates.
Overnight, Richmond Federal Reserve President Jeffrey Lacker
abruptly left the U.S. central bank after admitting that a
conversation he had with a Wall Street analyst in 2012 may have
disclosed confidential information about Fed policy options
The dollar lost its grip on earlier gains as concerns over a
North Korean missile test worsened sentiment ahead of the summit
between the U.S. and Chinese leaders.
Topping the agenda at Trump’s Mar-a-Lago resort in Florida
will be whether he makes good on his threat to use U.S.-China
trade ties to pressure Beijing to do more to rein in its
nuclear-armed neighbour North Korea, which is working to develop
missiles capable of hitting the United States.
The dollar index, which tracks the U.S. currency against a
trade-weighted basket of six peers, was down on the day at
100.48, as slumping U.S. Treasury yields also gave
investors little incentive to buy dollars.
"The meetings are expected to be informal, unscripted
discussions of how the two countries will address, but not
immediately resolve, their differences," said strategists at
Morgan Stanley in a note to clients.
"Any commentary on how the US specifically wants to try to
reduce the trade deficit with China will be watched by FX
investors," the strategists wrote.
European stocks were little changed on the day as the
cautious start to the second quarter continued. Oil and
mining-related stocks were outperformers, lured higher by firmer
Oil climbed to a near one-month high on signs of a gradual
tightening in global oil inventories and on concern about a
supply outage at a field in the United Kingdom's North Sea that
feeds into an international benchmark price.
Brent crude futures, the international benchmark for
oil, were up 1 percent at $54.73 per barrel. U.S. West Texas
Intermediate (WTI) crude futures was also up 1 percent.
London copper rallied as Chinese traders returned
from a two-day break to buy up metals following brighter global
manufacturing reports. Zinc and nickel tracked a rally in steel.
Safe-haven gold steadied helped by sluggish moves in riskier
assets. Spot gold edged up 0.1 percent.
(Reporting by Vikram Subhedar; Editing by Stephen Powell)