Forex- U.S. Dollar Falls on Trade Woes, as Pound Rallies After Data

The U.S. fell on Wednesday.

Investing.com - The U.S. dollar was lower against other currencies on Wednesday amid trade war tensions while the pound rose after better than expected inflation data.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.22% to 94.01 as of 5:48 AM ET (9:48 GMT).

On Tuesday China said it would impose new tariffs on U.S. goods worth $60 billion, effective September 24. The new tariffs are in response to U.S. tariffs on Monday of 10% on $200 billion in Chinese goods, which will go up to 25% at the end of the year. China also filed a complaint against the U.S. with the World Trade Organization, as expected.

Donald Trump tweeted that “there will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!” He previously stated that the U.S. would impose tariffs on another $267 billion of additional imports if China retaliates.

The Chinese yuan recovered slightly with USD/CNH falling 0.10% to 6.8546.

Elsewhere, the dollar fell against the safe-haven yen, with USD/JPY down 0.04% to 112.32. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.

Meanwhile sterling increased after the consumer price index came in higher than expected. GBP/USD increased 0.24% to 1.3179.EUR/USD rose 0.30% to 1.1699, driven higher by the fall in the greenback.

The Australian dollar was higher, with AUD/USD up 0.48% to 0.7252 while NZD/USD jumped 0.43% to 0.6611.

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