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Dollar Edges Higher, But Fresh Trade Concerns Weigh

2018-07-11 17:00    Investing

Dollar Edges Higher, But Fresh Trade Concerns Weigh Currency News

© Reuters. Dollar edges higher, but fresh trade concerns weigh

The dollar edged higher against a currency basket on Wednesday, but gains were capped after the U.S. said it would place tariffs on an additional $200 billion worth of Chinese imports, escalating a trade spat between Washington and Beijing.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched up 0.11% to 93.94 by 03:54 AM ET (07:54 AM GMT).

U.S. trade representative Robert Lighthizer said the U.S. was acting because China had not heeded previous warnings to halt unfair trade practices.

News of the additional tariffs pushed fears of a trade war back into focus just days after the U.S. imposed 25% tariffs on $34 billion of Chinese imports, and Beijing retaliated with matching tariffs on the same amount of U.S. imports.

The tit-for-tat tariffs have fueled worries that the world’s two largest economies could descend into an all-out trade war, which investors fear could hit global growth.

Uncertainty over the future of the North American Free Trade Agreement and concerns over tariffs that the Trump administration has imposed on European trading partners have also added to investor nerves.

The dollar was little changed against the yen, with USD/JPY last at 111.06, holding below the seven-week high of 111.35 hit on Tuesday.

The Japanese currency is often sought by investors as a safe haven in times of geopolitical tensions and market turmoil.

The euro was a touch lower, with EUR/USD dipping 0.1% to 1.1733. The pound was also slightly lower, with GBP/USD last at 1.3270.

The trade sensitive Australian dollar slumped, with AUD/USD losing 0.55% to trade at 0.7419.

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