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Forex - Dollar rebounds in Asia, loonie hit by U.S. lumber duties

Published 04/24/2017, 09:01 PM
Updated 04/24/2017, 09:03 PM
© Reuters.  Dollar up in Asia

© Reuters. Dollar up in Asia

Investing.com - The dollar rebounded slightly in Asia Tuesday as investors keep a close eye on developments on the Korean peninsula as the USS Carl Vinson aircraft carrier-led battle group heads to the Sea of Japan.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.06% to 98.97. USD/JPY changed hands at 109.7, up 0.01%, while AUD/USD traded at 0.7561, down 0.12%. EUR/USD fell 0.02% to 1.0865.

Japan reportedthe corporate services price index came in at the expected 0.8% gain year-on-year for March. Markets in Australia and New Zealand are shut for ANZAC day.

The dollar also gained against the loonie on Tuesday in Asia after U.S. Commerce Secretary Wilbur Ross said on Monday his agency will impose new anti-subsidy duties averaging 20% on Canadian softwood lumber imports, a move that escalates a long-running trade dispute between the two countries. USD/CAD traded up 0.39% to 1.3553 after a report on Reuters on the move.

Speaking to Reuters by phone a day ahead of the expected announcement, Ross said that the duties would affect $5 billion worth of softwood lumber imports from Canada.

"It's about 31.5% of the total U.S. market, so it's a pretty big deal in terms of the Canadian relationship," he said.

The trade case was filed at Commerce against Canadian lumber producers by their U.S. competitors, who argued that Canadian timber grown on public lands receives an effective subsidy from the government that is unavailable to the U.S. firms, who cut timber grown largely on private land.

Overnight, the euro eased from a 5-1/2 month high against the dollar on Monday, but remained close to session highs, as investors poured into the single currency, after the outcome of the first round of the French presidential election matched expectations.

Centrist candidate Emmanuel Macron garnered 23.8% of the vote while far-right candidate Marine Le Pen garnered 21.7%.

EUR/USD rose more than 1% as investors assumed Emmanuel Macron will beat anti-EU Marine Le Pen in the race for the French presidency, after polls indicated a victory for Mr Macron in the run-off vote, scheduled for May 7.

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