Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Dollar gains sustained by trade war risk, rising inflation

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/12/2018 | 09:39pm CEST
Ilustration photo of U.S. dollar and Japan Yen notes

NEW YORK (Reuters) - The U.S. dollar held steady at a six-month high against the Japanese yen and a two-month high against the Swiss franc on Thursday, bolstered by solid inflation data and investor sentiment that the greenback stands to benefit from a trade war.

The yen <JPY=> and the Swiss franc <CHF=> are favored as safe-haven investments. But against the dollar, both have weakened in the past week as trade tensions between the United States and China have mounted. That suggests investors believe the greenback is better suited to withstand trade volatility, as a safe-haven investment or as a beneficiary of new policies.

"The U.S. dollar has been playing more of a role as a safe-haven," said Juan Perez, currency trader at Tempus, Inc in Washington.

The dollar/yen rally is in its seventh trading day, with the dollar having broken through the psychologically significant barrier of 112 yen for the first time since Jan. 10 on Wednesday. On Thursday, the dollar hit a fresh six-month high against the Japanese currency of 112.62.

The Swiss franc weakened by 0.8 percent over the day, jumping over the one franc threshold; at its strongest on Thursday, 0.995 franc bought one U.S. dollar, at its weakest, it took 1.003.

"(A trade war) is probably good for the dollar," said Greg Anderson, global head of FX strategy at BMO Capital Markets. That's because "the U.S. has a trade deficit currency, and so if you find a way to reduce that trade deficit and you have the same financial flows, then all of the sudden, flows are going to be positive for the dollar, at least relative to where they were."

The dollar maintained gains made on Wednesday against most major currencies thanks in part to a report of U.S. consumer prices on Thursday which showed a steady buildup of inflation pressure that could keep the Federal Reserve on a path of gradual interest rate increases.

That followed Wednesday's report that U.S. producer prices rose in June, leading to the biggest annual increase in 6-1/2 years.

Strong economic data has underpinned the dollar's recent strength. "(The dollar) has been kept afloat because in quarter one and quarter two the economic indicators across the spectrum were positive," said Perez.

The eurodollar <EUR=> fell in overnight trade on Wednesday, retracing earlier gains, but maintained levels around $1.167 throughout Thursday.

Stock markets in China <.SSEC> rose more than 2.6 percent and the offshore yuan <CNH=> climbed 0.9 percent, boosting appetite for risky assets and helping push the dollar higher.

(Reporting by Kate Duguid; additional reporting by Saikat Chatterjee; Editing by Jonathan Oatis and Alistair Bell)

By Kate Duguid

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
12:22aECOSOC UNITED NATIONS ECONOMIC AND SOCIAL COUNCI : Development More than Simple Conflict-Prevention Tool In Today’s Globalized World, Secretary-General Tells High-Level Political Forum
PU
12:02aTESTER : Farmers and Ranchers Are Being Used as Pawns in Trade War
PU
07/19Recovery Blogger Kelly Fitzgerald Junco Sells Memoir About Her Adventures as The ‘Sober Senorita’
SE
07/18ZIONS BANCORPORATION : U.S. regulatory panel gives Zions Bancorp green light to shed Fed oversight
RE
07/18IRFA TO EPA : Stop Going Rogue on RFS Read More...
PU
07/18MORGAN GRIFFITH : House Passes Loudermilk-Griffith Amendment to Stop Regulatory Overreach
PU
07/18Kinder Morgan Canada profit drops on lower crude shipments
RE
07/18PEW CHARITABLE TRUSTS : Colorado Governor Orders 'Orphan' Oil and Gas Wells Reduction
PU
07/18CITGO says CEO's U.S. visa has been revoked
RE
07/18NEWS HIGHLIGHTS : Top Global Markets News of the Day
DJ
Latest news "Economy & Forex"
Advertisement