The buck crept up to a one-week high versus the Japanese yen, a safe haven. Concerns pre-G20 in Japan were slightly eased up.
The greenback gained around 0.3% to 108.13 yen, which was its highest since June 20.
Markets rooted for the dollar on Wednesday as it rose against the safe haven yen, which strengthens in times of political turmoil.
The US dollar index, which gauges the buck’s strength against a basket of other major currencies, gained 0.15% to 96.374.
The index had already fallen to a three-month low of 95.843 earlier this week over the Fed’s easing prospects.
However, the index regained some strength after Fed Chairman Jerome Powell capped the expectations for aggressive rate cuts.
The euro lost 0.2% to $1.1351, while the Canadian dollar remained on steady footing, with the crude oil’s swell buoying commodity-linked currencies.
The commodity currency traded at 1.3131 Canadian dollars after climbing overnight to 1.3108 Canadian dollars, which was its strongest since February.
Meanwhile, the New Zealand dollar crept near a two-month peak of $0.6693 hit on Wednesday. During that time, the currency recovered after the Reserve Bank of New Zealand decided not to lower rates.
The Aussie also climbed up to a two-and-a-half week high of $0.6999.
The markets are focused on the outcome of the G20 summit this week, with the US and China expected to meet on its sidelines.
On Wednesday, US President Donald Trump said that he planned to impose additional tariffs on Chinese goods if he wasn’t satisfied with the outcome of his meeting with Chinese counterpart Xi Jinping.
This comes after Treasury Secretary Steven Mnuchin said that there is still a way for the two presidents to hammer out a trade agreement.
Mnuchin also said that they were “about 90%” of the way to a trade deal.
“The message we want to hear is that they want to come back to the table and continue because I think there is a good outcome for their economy and the US economy to get balanced trade and to continue to build on this relationship,” he explained.
In general, investors are rooting for a continuation of the trade talks after this weekend’s meeting. Most are expecting that to happen, but there is still a looming doubt given the POTUS’ unpredictability.
Meanwhile, Federal Reserve Chairman Jerome Powell dampened expectations of a rate cut after he said that the US central bank is “insulated from short-term political pressures,” effectively pushing back the president’s demands for a rate cut.
Trump responded in an interview that Powell was doing “a bad job” in not cutting rates. Trump also compared him to European Central Bank President Mario Draghi, who Trump also criticized previously.
Draghi said last week that the Eurozone economy would require further stimulus if inflation didn’t pick up.
According to analysts, the Trump-Xi meeting’s outcome would be significant for the US monetary policy. For instance, if the two leaders agree to stop slapping tariffs at each other, the Fed wouldn’t have to cut rates.
On the flipside, if the two sides disagree, the Fed would probably be compelled to finally cut rates.
Key Points: AUD/JPY broke below a rising wedge, signalling possible bearish momentum, with immediate resistance at 103.00 and support at…
Key Points EUR/JPY Rises to 168.25: Strengthened by robust Eurozone economy and steady ECB policy. Eurozone GDP Grew by 0.3%…
Key Points: Nio's shares hit 44.20 HKD, up 20%, with electric vehicle deliveries up 134.6% year-on-year to 15,620. BYD leads…
Key Points: Ethereum fell sharply from $3,355 to a low of $2,813, reflecting high volatility and sensitivity to market dynamics.…
Key Points Nikkei 225 slightly fell by 0.1%, while the Hang Seng index surged by 2.4%. USD/JPY increased slightly, highlighting…
Key Points: Gold prices rose on MCX India to ₹71,278/10 gm and COMEX US to $2,328/oz. The US Dollar Index…
This website uses cookies.