Dollar rises as trade war fears fade, risk sentiment returns

LONDON (Reuters) - The dollar strengthened broadly on Monday and neared a six-month high against the Japanese yen as investors bought riskier assets, encouraged by signs that trade tensions have yet to hurt economic momentum.

As the second-quarter corporate earnings season begins investors appear to be ignoring the deepening trade conflict between the United States and China.

Instead the focus is on decent economic data, including favourable U.S. jobs figures and a healthy rise in German exports, which have pushed the dollar and the euro higher.

“Despite a hesitant start to July, the U.S. dollar remains among the strongest of currencies out there, owing to a hawkish central bank,” said Forex.com market analyst Fawad Razaqzada.

The Federal Reserve is expected to raise U.S. interest rates twice more this year at a time when other major central banks are refraining from monetary tightening.

The greenback could enjoy a further boost if U.S. consumer price inflation figures beat expectations when they are published on Thursday.

A broad appetite for risk in currency markets on Tuesday lifted the dollar against the Japanese yen, a currency usually bought in times of political uncertainty. It was up 0.5 percent at 111.35 yen, approaching a six-month high.

Elsewhere, the British pound recovered some of the losses suffered after two ministers quit over the government’s Brexit plans.

Expectations that Theresa May will survive as Prime Minister to start negotiating her blueprint with the European Union briefly pushed sterling into positive territory on Tuesday, though gross domestic product data in line with forecasts and the stronger dollar weighed on the currency.

The pound had tumbled more than a cent on Monday to below $1.32 amid speculation that Britain was descending into deep political turmoil less than nine months before it is to exit the EU in March 2019.

Conservative lawmakers say May is probably safe from a leadership challenge, but the departures have undermined the prime minister’s own proclamation of cabinet unity.

“The market is worried that yesterday’s resignations could be a sign of major instability within the British government. However, we see little indication of that ... sterling should correct its losses,” said Commerzbank FX analyst Esther Maria Reichelt.

Markets still expect the Bank of England to raise interest rates at its next policy meeting on Aug. 2, but analysts warn that any full-blown political crisis could dent those expectations.

The pound strengthened against the euro to 88.28 pence, having hit a four-month low of 89.025 pence per euro on Monday.

Elsewhere, currency markets were broadly risk-positive as investors appeared to shrug off concerns about the U.S.-China trade tensions.

The dollar’s index against a basket of six major currencies was up 0.3 percent at 94.374 after falling on Monday to 93.711, its lowest since mid-June.

That halted a rally by the euro, which fell 0.4 percent to $1.1706 and was heading for its biggest daily decline against the dollar in more than a week.

The yuan rose 0.3 percent in offshore markets to 6.6404 against the dollar, further away from the lows hit in June in its biggest ever monthly fall.

The yuan gained last week on the back of a stronger midpoint fixing and after data showed China’s foreign exchange reserves rising in June.

Turkey’s lira made up some of the Monday’s losses, trading 0.2 percent higher at $4.6890. The currency had gone as low as $4.7506 after President Tayyip Erdogan named his son-in-law as Treasury and Finance minister on Monday.

Editing by David Stamp and David Goodman

Panorama Hispano is the regional news and information newspaper for Hispanic and other diverse communities.

US Hispanics are now the largest ethnic minority in the United States numbering 54.2 million as of July 2014. Serving: Buffalo, Rochester, Fredonia, Niagara Falls, NY and Erie, PA. Outside our Market area: Visit our affiliate at: http://www.impremedia.com/

Contact us: Contact@PanoramaHispanoNews.com

Featured News

Jan 15, 2021
AMLO acusa a la DEA de “fabricar” acusación contra genera

CIUDAD DE MÉXICO (AP) — Un día después de que la fiscalía general de México anunció que desestimaba los cargos de narcotráfico contra su exsecretario de Defensa, el presidente Andrés Manuel López Obrador dijo el viernes que la agencia antidrogas de Estados Unidos (DEA por sus siglas en inglés) “fabricó” las acusaciones contra el general […]

Read More
Jan 15, 2021
Expanded vaccine rollout in US spawns a new set of problems

The rapid expansion of COVID-19 vaccinations to senior citizens across the U.S. has led to bottlenecks, system crashes and hard feelings in many states because of overwhelming demand for the shots. Mississippi’s Health Department stopped taking new appointments the same day it began accepting them because of a “monumental surge” in requests. People had to […]

Read More
Jan 15, 2021
Allen, Jackson set for playoff showdown as Bills host Ravens

ORCHARD PARK, N.Y. (AP) — Ravens coach John Harbaugh was immediately impressed by Buffalo quarterback Josh Allen’s competitive fire following their first face-to-face encounter in an NFL setting. It happened in the 2018 season opener, when the then-raw rookie Bills quarterback was shoved into the Ravens’ sideline. Allen hopped up and exchanged words with players […]

Read More

popular categories

Copyright © 2021 Panorama Hispano News. All Rights Reserved.
crossmenuchevron-downmenu-circlecross-circle
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram