Breaking News
0

Dollar steady, capped by confusion over U.S. stance on China investment

ForexJun 28, 2018 12:51AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Illustration photo of U.S. Dollar and China Yuan notes

By Shinichi Saoshiro

TOKYO (Reuters) - The dollar was steady against its peers on Thursday, having failed to extend overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter U.S.-China trade row kept financial markets on edge.

Demand stoked by the looming end of 2018's first half was seen supporting the dollar, which was not dented by lower U.S. yields and a slide in Wall Street shares.

The dollar index (DXY) against a basket of six major currencies stood steady at 95.266 after rallying 0.65 percent the previous day.

The greenback had advanced after U.S. President Donald Trump said on Wednesday he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.

There was, however, some confusion about Washington's intentions - with U.S. shares making an about-turn and dropping - after White House economic adviser Larry Kudlow told Fox Business Network later on Wednesday that Trump's announced plan did not indicate a softened stance on China.

Treasury Secretary Steven Mnuchin had favored a more measured and global approach to protecting U.S. technology, using authority approved by Congress, while White House trade adviser Peter Navarro, the administration's harshest China critic, had argued for China-specific restrictions.

"The dollar has managed to stay buoyant despite a drop in Treasury yields and risk-off in U.S. stocks due to half year-end flows, which involves U.S. investors buying back the dollar," said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.

"It remains to be seen how long flow-driven bids can support the dollar. Headlines on trade issues will continue to dictate direction once such flows subside."

The dollar was flat at 110.23 yen . The currency rose to 110.49 the previous day before pulling back slightly following Kudlow's comments on Trump's investment restriction plans.

The euro was a shade higher at $1.1567 (EUR=) after shedding 0.8 percent overnight. Concerns over political complications in Germany are expected to be a drag on the single currency.

German Chancellor Angela Merkel's fragile coalition government faces potential collapse as the Christian Social Union (CSU), her Bavarian ally, has threatened to defy her and impose border controls unless their demands to reduce Germany's immigration burden are met.

At the European Council Summit later on Thursday, Merkel will try to secure agreements on immigration on a continental level to appease the CSU.

"The odds are seemingly against Merkel obtaining a meaningful solution and the euro looks set to suffer further declines depending on the headlines coming out of the summit," said Daisuke Karakama, chief market economist at Mizuho Bank.

The Australian dollar managed a modest bounce after sliding the previous day on lingering U.S.-China trade tensions. The Aussie was up 0.2 percent at $0.7356 after plumbing a 1-1/2-year trough of $0.7323 on Wednesday.

China's yuan continued its slide, touching a new six-month low of 6.626 per dollar amid Sino-U.S. trade tensions.

Dollar steady, capped by confusion over U.S. stance on China investment
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with 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
  • 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.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. 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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email