Investing.com - The dollar edged higher against a basket of the other major currencies on Wednesday as investors awaited the outcome of trade talks between China and the U.S. this week and monitored growing political risks in the U.S.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.13% to 95.26 by 04:03 AM ET (08:03 AM GMT) after falling 0.69% the previous day.
Market sentiment has been boosted by the revival of trade talks between Washington and Beijing.
Investors hope the talks will ease trade tensions between the world’s two largest economies, even after U.S. President Donald Trump played down the prospects of any imminent success.
Hopes for progress on trade were offset by concerns over U.S. political developments overnight.
Trump’s former personal layer Michael Cohen possibly implicated the president on legal issues and Trump campaign chairman Paul Manafort was convicted on criminal counts in the first trial to come as a result of special counsel Robert Mueller's Russia probe.
The dollar had already come under pressure after Trump said Monday that he was "not thrilled" with Fed Chairman Jerome Powell for raising interest rates.
Trump nominated Powell to succeed former Fed Chair Janet Yellen earlier this year.
The Fed has been hiking rates and is expected to continue doing so, with another two increases expected this year.
The Fed was to publish the minutes of its August meeting later in the day, with investors on the lookout for any tweaks to its outlook on inflation, the economy and trade war fears.
On Friday, Powell is to make his first appearance as Fed chairman at the annual economic symposium in Jackson Hole.
The euro was a touch lower against the dollar, with EUR/USD dipping 0.11% to 1.1557. The single currency rallied 1.09% against the dollar on Tuesday, hitting a one-and-a-half week high of 1.1600.
The euro has rebounded since plumbing 13-month lows against the dollar last week amid fears over contagion effects on European banks from Turkey’s currency crisis.
The dollar edged higher against the yen, with USD/JPY rising 0.16% to 110.41, up from an overnight low of 110.02.
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