Yahoo Finance Forex – Dollar Weakens Amid Global Trade Tensions and U.S. Political Turmoil
Investing.com - The dollar remained soft against other currencies in Asia Thursday morning as an increasingly hawkish U.S. government intensified global trade tensions that are pushing investors to sell risky assets and lifting Japanese yen.
The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 89.67 at 10:10pm ET, down 0.09%. The sentiment for the greenback remained bearish this week and the index dropped below the 90 mark.
After several high-profile departures from the White House including the pro-free-trade chief economic advisor Gary Cohn and the pro-dialogue State of Secretary Rex Tillerson, the administration of U.S. President Donald Trump is set to be populated by hawkish officials who embrace protectionism and military activity. The personnel reshuffle in the White House is renewing concerns over a potential global trade war and fueling uncertainty over developments in the Korean Peninsula, pushing investors to turn from the dollar to safe-haven currencies such as the Japanese yen.
In the latest personnel shakeup, Trump decided to appoint Larry Kudlow as the top economic advisor. Kudlow, previously known as a free trade advocate, reportedly said that China will be the target for tariffs, which increased the prospects of a U.S.-China trade war. Kudlow also hinted support for a stronger dollar in an interview with CNBC.
The USD/JPY pair shed 0.26% to 106.03, a rather sharp slump from Tuesday’s 107.20. The global trade tensions hampered the investors’ risk appetite, which stimulated demand for the yen that is often sought in times of risk aversion. In addition, Japan’s month-on-month industrial production data are due Friday.
The AUD/USD pair traded at 0.04%, up 0.7880%. The Aussie has been moving up against a softer dollar this week. Australia’s February employment report will come next week, which may fuel the pair’s upside momentum. Meanwhile, the Reserve Bank of Australia has not released any signs of rates hikes.
Elsewhere, The People’s Bank of China set the fix rate of yuan against the dollar at 6.3141 versus Wednesday’s 6.3238. The USD/CNY pair eased 0.11% to 6.3110. Eyes will be on the escalating trade tensions between the U.S. and China.
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