Yahoo Finance U.S. Dollar Retreats After Trump Calls Off North Korean Summit
The U.S. Dollar closed lower against a basket of currencies on Thursday, losing ground to most majors. The Greenback fell after U.S. President Donald Trump called off a summit meeting with North Korean leader Kim Jong Un.
June U.S. Dollar Index futures settled at 93.701, down 0.217 or -0.23%.
Traders also booked profits on the notion that the recent rally had run its course especially after the release of dovish Fed minutes on Thursday that signaled the central bank would not be as aggressive when raising interest rates in 2018.
Trump called off the planned June summit meeting with the North Korean leader even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site. In canceling the summit, Trump accused North Korea of “tremendous anger and open hostility.”
“Sadly, based on the tremendous anger and open hostility displayed in your most recent statement, I fell it is inappropriate, at this time, to have this long-planned meeting,” Trump wrote in a letter to Kim, which was released Thursday morning.
“You talk about your nuclear capabilities, but ours are so massive and powerful that I pray to God they will never have to be used,” Trump wrote.
A senior White House official also said that North Korea had suspended direct communication with the U.S. over the past week.
The cancellation took South Korea’s government by surprise. A representative of Moon’s office said the South Korean administration was “trying to figure out what President Trump’s intention is and the exact meaning of it,” according to the country’s Yonhap News Agency.
Forex
Flight-to-safety buying in reaction to the North Korean news and a dip in Treasury yields helped weaken the Dollar/Yen. The sudden change in investor sentiment drove investors out of riskier assets and encouraged them to park their money in safe haven assets instead.
The USD/JPY settled at 109.251, down 0.832 or -0.76%.
The weaker U.S. Dollar helped support the Euro, nonetheless, the single-currency is still in a position to close lower for a sixth consecutive week against the dollar, its longest such streak since January 2015. The Euro has been pressured recently by worries over a deepening economic slowdown in the Euro Zone and geopolitical issues in Italy.
The EUR/USD settled at 1.1720, down 0.024 or -0.20%.
The British Pound posted a solid gain against the U.S. Dollar after the release of upbeat U.K. Retail Sales data, but backed off session highs due to persistent concerns over Brexit negotiations.
The GBP/USD settled at 1.3381, up 0.0031 or +0.23%.
This article was originally posted on FX Empire
