Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar holds up on trade, European political worries; U.S. yields fall

Forex May 28, 2019 09:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: U.S. dollar notes are seen in front of a stock graph in this picture illustration

By Daniel Leussink

TOKYO (Reuters) - The dollar managed to hold on to most of its overnight gains on Wednesday after investors scooped up safe-haven assets, including U.S. Treasuries, on lingering fears of a further escalation in the Sino-U.S. trade dispute.

Losses in the euro in the previous session also helped support the dollar, as analysts warned of more risks for the single currency on uncertainty surrounding the euro zone economy and the bloc's political future.

"It looks like there has been a real surge in U.S. Treasuries," said Nick Twidale, chief operating officer at Rakuten Securities Australia in Sydney.

"We're probably going to see some catch-up in the foreign exchange market over the next few sessions," Twidale said, adding that he expected safe-haven currencies such as the Japanese yen and the Swiss franc to be in demand.

Against a basket of six peers, the dollar was down less than 0.1% at 97.897, having ended up 0.3% overnight. The index was trading about 0.5% off a two-year high of 98.371 hit on Thursday and is still up 1.8% for the year.

The dollar held mostly steady even after benchmark 10-year U.S. Treasury yields hit as low as 2.243%, their lowest since September 2017. The greenback's own status as a safe-haven helped amid worries about the trade tensions and Italy's budget policy. The U.S. 10-year yields were last at 2.253%.

The euro edged up 0.1% to $1.1167, bouncing slightly after shedding nearly 0.3% during the previous session. The common currency remained not far off a near two-year low of $1.11055 brushed on Thursday.

European Union leaders are set to begin the process of filling a number of top EU posts, from the head of the European Commission to the European Central Bank.

"The reason we've seen the euro drop off is because the European zone in particular has been threatened by and troubled by the trade concerns," said Rakuten's Twidale.

"On the back of that, we also had those European elections so there's a lot of political instability in Europe," he added. "That's putting pressure on the currency."

Italian Deputy Prime Minister Matteo Salvini, whose far-right League triumphed in European elections on Sunday, said the European Commission could fine Italy 3 billion euros for breaking EU debt and deficit rules, a comment that weighed on the single currency.

The yen was 0.15% stronger at 109.22 per dollar on the lower U.S. yields and after U.S. President Donald Trump said on Monday he expected Japan and the United States to announce a trade agreement "probably in August."

The yen, which tends to draw steady support from a flight-to-safety bid during geopolitical or financial stress as Japan is the world's biggest creditor nation, remained just 0.2% above a three-month high of 109.02 yen touched on May 13.

The Australian dollar inched up to $0.6929, about 0.9% off a recent trough of $0.6865.

Dollar holds up on trade, European political worries; U.S. yields fall

Related Articles

Dollar Edges Higher, Lifted by Safe Haven Demand
Dollar Edges Higher, Lifted by Safe Haven Demand By - Jul 01, 2022 3

By Peter Nurse - The U.S. dollar edged higher in early European trade Friday, trading close to the highs of the year on safe-haven demand as central banks take on...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email