Investing.com - The dollar fell sharply against a basket of major currencies on Monday, as investors fled the greenback amid rising tensions over North Korea.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.43% to 100.06 by 17:54 EDT.
Despite China’s efforts to dissuade North Korea from carrying out continued missile tests, the Kim Jong-Un led nation attempted to fire a ballistic missile on Sunday but it blew up almost immediately.
U.S. Vice President Mike Pence responded to North Korea’s failed missile attempt Monday, warning that “the era of strategic patience” with North Korea “is over”.
Meanwhile, weaker than expected economic data weighed on sentiment, after New York area manufacturing slowed by more than expected in April.
The Empire State manufacturing survey fell to a reading of 5.2 April, well below consensus expectations for a reading of 15.
The rising geopolitical concerns stoked a flight to safety sentiment, as investors fled the dollar in favor of safe-haven yen. USD/JPY fell to five-month low earlier during the session but has since recovered to trade at 108.47, down 0.17%.
The yen gained against both the euro and sterling but later pared gains, with EUR/JPY up 0.26% at 115.61 while GBP/JPY added 0.37% to 136.56.
Meanwhile, the GBP/USD rose to a three-week high of $1.2597, while EUR/USD added 0.41% to trade at 1.0655. Trading volumes remained thin, as European markets observed the Easter holiday.
USD/CAD traded at $1.3289, down 0.28%.