Investors have been reconciling conflicting signals on Tuesday about the status of trade negotiations between Washington and Beijing. Stocks rose early Tuesday reports that signaled a likely delay in the next round of duties, but pulled back after White House economic advisor Larry Kudlow said tariffs were still on the table.
Traders remained cautious amid uncertainties surrounding an initial trade deal between the United States and China. China and the U.S. have until Sunday to come strike a so-called phase one trade deal. If an agreement wasn't reached by then, new U.S. tariffs will take effect. Tariffs on another $156 billion in Chinese goods are set to go into effect on Dec. 15.
The US-China situation has overshadowed other trade issues, including progress on a new deal involving the US, Canada and Mexico. Democrats in the House of Representatives and the White House announced a revised deal with Mexico and Canada. The deal would replace the North American Free Trade Agreement and would offer more provisions for U.S. workers. The deal includes stronger labor enforcement rules and environmental protections than the pact the Trump administration negotiated with Canada and Mexico last year.
Also in focus for investors this week will be central banks, with policy meetings at the Federal Reserve on Wednesday and the European Central Bank that may offer clues on whether more monetary easing is in store in 2020.
The dollar rose to 108.73 Japanese yen from 108.62 yen on Monday. The euro strengthened to $1.1096 from $1.1064.
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