Yahoo Finance Dollar Gets Lift From Easing Trade War Fears
Investing.com – The U.S. dollar rose sharply against its rivals Wednesday, as a rout of safe-haven currencies prompted traders to pile into the greenback after the White House softened its stance on restricting foreign investment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.48% to 94.81.
U.S. President Donald Trump said he would back Congress' passage of the Foreign Investment Risk Review Modernization Act (FIRRMA), which would expand the powers of the Committee on Foreign Investment in the United States (CFIUS), helping it combat alleged theft of U.S. intellectual property by China.
The decision to back CFIUS and not the somewhat harsher International Emergency Economic Powers Act of 1977 – which would have allowed Trump to unilaterally impose restrictions – sparked risk appetite, sending safe-haven currencies like the yen and Swiss franc sharply lower against the greenback.
USD/JPY rose 0.25% to Y110.34, while USD/CHF rose 0.50% 0.9962.
Mixed U.S. economic data showing an unexpected narrowing of the U.S. trade deficit and weaker durable goods orders did little to curb demand for the dollar.
The Commerce Department said on Wednesday Core Durable Goods Orders fell 0.3% last month, missing economist forecast for a 0.5% rise.
The US trade deficit narrowed to $64.85 billion, well below economists' forecasts of $68.9 billion, from a revised $67.34 billion.
The dollar's move higher was also supported by a slump in both the euro and sterling as the latter was weighed down by Brexit angst, and uncertainty as to whether the Bank of England would hike interest rates this year.
EUR/USD fell 0.54% to $1.1585, while GBP/USD fell 0.62% to $1.3142.
USD/CAD rose 0.02% to C$1.3309 as rallying oil prices continued to support the loonie, limiting gains in the currency pair, after the Energy Information Administration's weekly report showed a massive draw in domestic crude supplies.
Related Articles
Forex - Dollar Hits Day’s Highs as U.S. Backs off Escalating Trade Spat
Forex - Dollar Slips, Yen Gains as Trade Fears Weigh
Forex - Dollar Little Changed; PBOC Sets Weakest Yuan Fix Since Last December
