Better U.S. Yields Slightly Lift Dollar Amid Trade War Threat

Wednesday,   20-Jun-2018   10:51 AM (IST)

The dollar gained slightly on Wednesday morning trade in Asia as yields on U.S. treasures bounced off lows but concerns lingered over a U.S.- China trade war that is heating up and hindering the recovery of the greenback.The USD/JPY pair climbed 0.1% to 110.14. It fell to 109.55 on Tuesday as the yen strengthened after U.S. president Donald Trump stated that he had asked U.S. trade representatives to come up with a new list of Chinese goods that may potentially be targeted by additional tariffs.The yen is a safe-haven currency. Demand for the yen increases in times of political tension and market turmoil.The market has gone into risk-off mode after the announcement of the possible new 10 percent tariffs on $200 billion Chinese goods and an angry reply from Beijing saying that “the United States has initiated a trade war and violated market regulations and is harming the interests of not just the people of China and the U.S., but of the world.The AUD/USD pair hit 0.7386, up 0.14%, after dipping to a 13-month low of $0.7347 on Tuesday. The Aussie dollar is considered sensitive to shifts in sentiment towards China.Elsewhere, The USD/CNY pair was down 0.11% to 6.4777The People's Bank of China (PBOC) set the yuan reference rate at 6.4586 versus Tuesday's fix of 6.4235.