LONDON (ShareCast) - (Sharecast News) - A more 'constructive' news-flow on the global trade front and news of a breakthrough in talks on the UK's withdrawal between London and Brussels, kept the Greenback from hitting a fresh 52-week high on Tuesday.
As of 2100 GMT, the US dollar spot index was edging lower by 0.23% at 97.2270, although at one point during the session it came within a whisker of its previous 52-week highs at 97.6930.

Triggering the profit-taking, US National Economic Council, Larry Kudlow, told broadcaster CNBC that US and China trade talks had restarted and were ongoing "at all levels", alongside "very good communication" with the European Union and Japan.

Kudlow also clashed with White House trade advisor, Peter Navarro, who on Friday had warned 'Wall Street' not to try and steer discussions.

Against that backdrop, even the European single currency was higher, bouncing 0.46% to 1.12851, despite the uncertainty around what Italy's response to the EU's request for a revised 2019 budget would be.

Sterling meanwhile was advancing by 0.85% to 1.29612 and earlier in the session reached an intra-day high of 1.3048 after news broke of an agreement between the UK and the rest of the European Union.

However, analysts were quick to point out that it remained to be seen whether the Prime Minister's proposals would pass muster with her Cabinet and Parliament.

Indeed, according to some analysts, the risk of further Cabinet resignations overnight could not be ruled out and it remained quite likely that Corbyn and the most hard-line Brexiteers would again make common cause to defeat May's proposal if it ever got as far as Parliament, helped this time perhaps by some of the DUPs MPs as well.

On that note, said Ruth Gregory, UK economist at Capital Economics: "We are clearly not out of the woods yet. As such, sterling's rally may prove short lived.

"Full details of the proposals are not yet available. So it is not clear whether Theresa May has made any further concessions [...]

"If a Brexit deal is secured this side of Christmas, that's all to the good. But we would not be surprised if a deal were not secured until well into 2019. That underpins our view that sterling could pull back by end-2018 and that the Bank of England will not raise rates again until Q2 2019. We will continue to monitor and respond to events as they unfold."

Further afield, the US dollar was little changed against the Chinese yuan, drifting lower by 0.11% to 6.9560.

Dollar/yen was again the odd man out among the major currency pairs, finishing the day essentially flat at 113.766.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE