Yahoo Finance Dollar Dives as Trade Concerns Flare Up; Sterling Strengthens
Investing.com - The dollar fell against its rivals Monday, on fears of an escalation in the U.S.-China trade war, while a stronger pound and euro also weighed on sentiment.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.46% to 94.07.
U.S. President Donald Trump was expected to announce new 10% tariffs on $200 billion in Chinese goods as soon as Monday, though some said the administration decision to lower tariffs had tempered fears somewhat of a full-blown trade war.
The new 10% tariffs are below an original figure of 25% floated by the administration earlier, The Wall Street Journal reported. The fresh round of levies comes just a week ahead of new trade talks between the U.S. and China. China vowed to hit back with countermeasures should the U.S. follow through on plans to impose tariffs.
The trade-war proxy AUD/JPY, rose 0.36% to 80.45, while risk-sensitive USD/JPY fell 0.07% to Y111.97.
The Australian economy relies heavily on exporting raw materials (primarily metals), particularly to China, which accounts for about a third of Australian exports every year.
Still, investors remain on edge amid fears of further trade disputes after Trump in a tweet threatened further tariffs on trade partners that fail to make to make "fair deals."
A stronger pound also kept the dollar in the red as investors cheered reports of positive remarks on Brexit from the European Council.
The EU Council reported said that some parts of Brexit draft had been "agreed in principle." This comes just days before Brexit talks are set to resume on Wednesday.
GBP/USD rose 0.60% to $1.3149.
EUR/USD rose 0.59% to $1.1691 amid in-line consumer inflation data and optimism Italy will deliver a budget within the European guidelines.
USD/CAD fell 0.08% as investors continued to hope the U.S.-Canada will reach an agreement on a deal to revamp the North American Free Trade Agreement as early as this week.
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