Forex – Dollar Hits New 4-Month High as Trade Dispute Worsens

0

Investing.com — The dollar hit a four-month high against the Chinese yuan but was lower against the yen and Swiss franc early Monday in Europe as the worsening trade conflict between the U.S. and China prompted bids for ‘safe-haven’ assets.

At 03:00 AM ET (0700 GMT), the dollar was at 109.73 yen, down 0.2% from late Friday, and having dipped as low as 109.60 overnight. That was just a little above the three-month low that the pair hit on Friday as a fresh round of U.S. tariffs on Chinese imports came into force.

The dollar hit a new four-month high against the yuan of 6.8654 overnight.

Over the weekend, President Donald Trump initiated a process to levy 25% tariffs on all remaining untouched Chinese imports, but the two sides continued to negotiate, avoiding an all-out breakdown of the talks. It’s still unclear what form China’s promised retaliation will take.

Anthony Kettle, a senior portfolio manager with BlueBay Asset Management, said it was “logical” that any deal to settle the dispute will now be delayed and that global growth in the second quarter could suffer as a result.

“This represents a significant change compared to market expectations for a deal being signed this week,” Kettle said. “Trade uncertainty is not the market’s friend, and this leads us to take a more cautious stance in the near term, despite the better economic data of late.”

The dollar index, which measures the greenback against a basket of six major currencies, was at 97.340, effectively unchanged from Friday as weakness against havens was offset by a rise against risk proxies such as the Aussie and loonie.

In Europe, there was little on the data or political calendar to move the euro or British pound. Sterling may be buffeted later in the week by more political maneuvering ahead of European Parliament elections in nine days’ time, as poor polling numbers put more pressure on Prime Minister Theresa May to break off talks with the Labour Party on a cross-party deal to deliver Brexit.

Read more at : https://www.investing.com/news/forex-news/forex–dollar-hits-new-4month-high-as-trade-dispute-worsens-1865743

LEAVE A REPLY

Please enter your comment!
Please enter your name here