Forex – Dollar Hits Nearly 1-Year High Amid Latest White House Trade Salvo

0
10

© Reuters. © Reuters.

Investing.com – The U.S. dollar rose to its highest level in nearly a year against its rivals, as U.S.-China trade-war concerns intensified after U.S. President Donald Trump threatened China with fresh tariffs.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.31% to 94.70 after trading as high as 94.94.

Fears of full-blown trade war came to the fore Tuesday as China vowed to retaliate to the latest trade salvo from the White House after Trump had threatened to impose a 10% tariff on $200 billion of Chinese goods.

That ushered in a wave of demand for safe-haven yen, keeping the dollar’s upside momentum in check.

USD/JPY fell 0.44% to Y110.03.

Mixed U.S. economic data also stoked support for the greenback as housing starts topped expectations but housing permits fell short.

The Commerce Department said Tuesday U.S. homebuilding rose 5% to a seasonally adjusted annual rate of 1.350 million units in May, well above economists’ estimates for a 1.4% rise.

The report also highlighted a sharp 4.6% decline in building permits to a rate of 1.301 million units.

Analysts warned that the bullish uptick in housing starts was partly supported by the weather, and claimed that the less volatile building permits data was more telling of the underlying housing construction market.

“The pace of permit issuance is much less sensitive to the weather than starts, and it usually reflects the pace of new home sales, which may have peaked for this cycle,” Pantheon said.

EUR/USD fell 0.46%, while GBP/USD fell 0.60% as the latter pair continued to come under pressure ahead of the vote on the Brexit Withdrawal bill slated for Wednesday, and the Bank of England meeting due Thursday.

USD/CAD rose 0.57% to C$1.3277 as oil prices fell heavily, weighing on the loonie, amid concerns major oil producers were set to lift output at OPEC’s meeting later this week.

sponsoredArticle = ‘div-gpt-ad-1466339494851-0’;