Aussie dollar falls as US, China delay trade meeting

London

THE Australian dollar fell on Thursday after reports that a meeting between China and the United States to end their trade war had been delayed.

The meeting between President Donald Trump and President Xi Jinping won't occur this month and is more likely to happen in April at the earliest, Bloomberg reported.

The Australian dollar reacted the most to the report, falling to its lowest in three days at $0.7049, down 0.6 per cent on the day.

Concern remains that any escalation in the trade conflict will hit hard export-oriented economies such as Australia, whose biggest trading partner is China.

The yuan was relatively stable in the offshore market. It was down half a per cent at 6.7353, not far from a one-month low of 6.7372.

The US dollar gained for the first time in a week as the pound fell after a vote on Brexit that failed to deliver much clarity on where Britain's relationship with the European Union was headed.

The pound had soared nearly 2 per cent late on Wednesday after British lawmakers voted against a potentially disorderly "no-deal" departure from the European Union. The pound was down 0.9 per cent at $1.3208.

Traders are bracing for a parliamentary vote later today that is expected to call for a short delay to Brexit.

Analysts cautioned against betting on sterling strength.

Uncertainty remains about what form Brexit will take, less than three weeks before Britain's scheduled departure from the EU on March 29.

British lawmakers are expected to vote on Thursday to delay that departure.

"The most sensible approach seems to be to hedge sterling's downside risks, which we deem to be larger than the remaining upside potential over the next couple of months," UBS said in a note to clients.

The dollar index, a gauge of its strength against six other major currencies, was up 0.2 per cent at 96.769. It shed 0.4 per cent overnight, at one point brushing a nine-day trough of 96.385. REUTERS