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FOREX

Dollar Rises at 0.2 Percent on Monday

Dollar

The dollar rose at 0.2 percent on Monday.

Most of its gains were chalked up against the Asian currencies with the Chinese yuan holding near the day’s lows against the greenback after a media report that China was evaluating the potential impact of a gradual yuan depreciation as a tool in the escalating trade dispute.

“These sort of headlines are more of a tool to elevate tensions and is being used as a negotiating strategy and markets are waiting for concrete measures,” Altana Hard Currency Fund portfolio manager Ian Gunner said.

The dollar rose 0.2 percent against a basket of currencies extending earlier gains. Over a two-week period, it is up nearly 1.5 percent. It rose about 0.2 percent against the Japanese yen.Trade war concerns have prompted investors to trim their record bearish bets against the greenback, with latest positioning data showing that net short bets against the dollar have fallen for the second week.

UBS strategists say a trade war would hurt Asian exports and prompt outflows from export-oriented equity markets such as Singapore, Malaysia and Taiwan.

Chinese state researchers and media have talked down the likely impact of U.S. trade measures on the world’s second largest economy and described the Trump administration’s posturing on trade as the product of an “anxiety disorder”.

The dollar index set a one-month high of 90.597 ahead of the U.S. nonfarm payrolls report data on Friday but later lost some steam, weighed down by concerns about the U.S.-China trade dispute and disappointing U.S. jobs data.

“We’re no longer in a phase where the dollar keeps falling persistently against the yen,” Barclays senior strategist Shinichiro Kadota said.

Source: Reuters

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