Investing.com - The U.S. dollar rose on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed to a trade truce, although it was kept in check by weak manufacturing data.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.5% to 96.107 by 10:40 AM ET (14:40 GMT).
Over the weekend Trump agreed to hold off on new tariffs and ease some restrictions on Chinese tech giant Huawei, while China agreed to purchase unspecified farm products from America. Both sides agreed to restart trade negotiations, which have been on hold for the last few months.
Meanwhile ISM manufacturing data fell to its lowest level since September 2016, even as it beat expectations.
The data support the case for the Federal Reserve cutting rates, with the chances of cut at the central bank's next meeting priced in at 100%. The Fed opened up the door at its last policy meeting for a rate cut this year.
The dollar was higher against the safe-haven Japanese yen, with USD/JPY rising 0.4% to 108.31.
A report overnight showed that China's factory activity unexpectedly fell in June, as its manufacturing sector remains under pressure from the trade war.
Elsewhere, the euro rose with EUR/USD down 0.3% to 1.1333, while GBP/USD slumped 0.4% to 1.2638 and USD/CAD inched up 0.1% to 1.3105.