TOKYO (Reuters) – The dollar struggled near 2-1/2 month lows, while the yen also sagged on Friday on reduced safe haven demand amid a switch in investors’ view that the Sino-U.S. trade conflict would not lead to an immediate global shock.
The index has fallen more than 1 percent this week, with investor flows being diverted from the greenback to other currencies including emerging market ones amid an ebb in U.S.-China trade war concerns.
“It appears that positions which were skewed towards risk aversion are being reversed across the board,” said Makoto Noji, senior strategist at SMBC Nikko Securities in Tokyo.
“The trigger was Chinese Premier Li’s comments on the yuan, which has led to hopes of a more moderate outcome to the U.S.-China trade row,” he said.
Premier Li Keqiang pledged on Wednesday that Beijing will not engage in competitive currency devaluation, a day after his country and Washington plunged deeper into a trade war with more tit-for-tat tariffs.