🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

FOREX-Dollar treads water as trade fears cap bounce from 2-wk low

Published 27/06/2018, 01:29 pm
© Reuters. FOREX-Dollar treads water as trade fears cap bounce from 2-wk low
EUR/USD
-
USD/JPY
-
AUD/USD
-
USD/CNY
-
DX
-
US10YT=X
-
DXY
-

* Dollar index off 2-wk lows but capped by lingering trade woes

* Euro weighed down ahead of Italian govt bond auctions

* Aussie dips back towards 13-mth lows (Updates throughout)

By Shinichi Saoshiro

TOKYO, June 27 (Reuters) - The dollar held steady against a basket of currencies on Wednesday, its earlier bounce from two-week lows flagging amid lingering trade conflict concerns.

The dollar index against a basket of six major currencies was steady at 94.652 .DXY after gaining 0.4 percent overnight to snap a four-session losing run.

While a modest easing in concerns over an escalating trade row between the United States and its trade partners had lifted the dollar off a two-week trough of 94.171, wariness lingered and capped the dollar.

Underlining investor caution, equity markets in Asia extended losses and slipped across the board on Wednesday.

"The spat is beginning to have an actual impact on corporate behaviour and this is the difference from the earlier stages of the trade row," said Koji Fukaya, president at FPG Securities in Tokyo.

"The 'risk off' trend has started to impact corporations in the developed markets, clouding the outlook for their economies and suppressing dollar demand."

The dollar was 0.1 percent lower at 109.92 yen JPY= , after going as high as 110.23 on Tuesday. The yen is often sought in times of market turmoil and political tensions.

"The dollar lacks guidance from U.S. yields, which have been directionless. Furthermore, it is difficult to gauge whether the Trump administration is poised to become even more conservative towards trade issues or if it wants to ease its stance," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

The 10-year U.S. Treasury note yield US10YT=RR was unchanged at 2.882 percent. The yield has been confined in June to a 15 basis point range after fluctuating by nearly 40 basis points in May, during which it touched a seven-year high of 3.128 percent.

The euro was a shade higher at $1.1657 EUR= after losing 0.5 percent overnight, when a rise in Italian bond yields ahead of debt auctions later this week soured sentiment towards the single currency.

Italy will sell five- and 10-year bonds on Thursday, with the auctions seen as a test of investor appetite for the country's debt following the political turmoil that gripped Rome last month.

Sterling was effectively flat at $1.3224 GBP=D3 .

The pound had dropped 0.45 percent on Tuesday after an incoming Bank of England policymaker expressed caution over Britain's readiness for higher interest rates and uncertainty over the impact of Brexit on the economy. trade-sensitive Australian dollar was down 0.25 percent at $0.7371 AUD=D4 , edging back towards a 13-month low of $0.7345 plumbed last week.

The Chinese yuan slipped to a new six-month low of 6.615 per dollar CNY=CFXS after the People's Bank of China (PBOC) lowered the currency's midpoint for the sixth straight day to its weakest in six months. yuan had slumped on Tuesday on expectations that Beijing will let the currency weaken further to soften the impact of trade tariffs imposed by the United States. (Editing by Shri Navaratnam and Eric Meijer)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.