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Dollar Steadies After Navarro Clarifies Trade Deal Comments

By Gina Lee – The dollar was up on Tuesday morning, steadying an earlier surge after White House trade advisor Peter Navarro clarified his statements concerning the U.S.-China trade deal.

Investors were taken on a roller-coaster ride earlier in the session after Navarro said that the deal was “over” on Monday, only to issue a clarification shortly afterwards stating that his comments had “been taken wildly out of context.”

U.S. President Donald Trump provided further assurance after he tweeted that the deal was “still intact.”

Daisuke Uno, chief strategist at Sumitomo Mitsui (NYSE:SMFG) Bank, told Reuters, "It's not clear exactly what is over, but today's market reaction suggests that after riding on optimism on the economy, markets are now ready to test the pessimistic side of the story,” referring to Navarro’s earlier comment.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.01% to 96.998 by 12:07 PM ET (5:07 AM GMT). Investors rushed to the safe-haven asset after Navarro’s initial comments over fears of rising U.S.-China tensions, only to slowly retreating after the clarifications.

The USD/JPY pair gained 0.30% to 107.19.

Riskier currencies such as the AUD recouped their earlier, temporary losses. The AUD/USD pair was up 0.14% to 0.6915, but the NZD/USD pair lost 0.06% to 0.6474.

The USD/CNY pair was up 0.13% to 7.0772, and the GBP/USD pair gained 0.12% to 1.2475.

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