Investing.com - The dollar fell in Asia on Thursday ahead of policymaker statements expected to whipsaw currency markets starting in Europe that could see fresh remarks on the greenback.
USD/JPY fell 0.12% to 109.09, while AUD/USD rose 0.29% to 0.8084. EUR/USD gained 0.14% to 1.2426 ahead of the ECB meeting when many expect the central bank to keep rates unchanged but focus will likely be on ECB president Mario Draghi press conference and a timeframe for a return to normalization in policy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.13% to 88.90.
Mnuchin will have the chance Thursday to offer any clarification on a change from a long-standing strong dollar policy as part of a panel at 11 a.m. CET at Davos that includes IMF Managing Director Christine Lagarde.
But also in Davos, US Commerce Secretary Wilbur Ross later chimed in saying the US is not abandoning its strong dollar policy.
Overnight, the dollar extended its retreat against a basket of major currencies as Mnuchin’s endorsement of a low dollar attracted heavy selling pressure in the greenback.
“Obviously a weaker dollar is good for us as it relates to trade and opportunities," Mnuchin told reporters in Davos, according to Bloomberg.
Also adding to the dollar weakness, was a modest uptick in safe-haven demand amid growing fears of a US-China trade war after Commerce Secretary Wilbur Ross claimed that China’s tech ambitions under its 2025 were a “direct threat” that is being implemented “by disrespect for intellectual property rights” among other “very bad things.”
GBP/USD rose as the pair eyes a test of pre-Brexit vote levels around $1.5. The sharp uptick in the pound came as investors cheered bullish employment data including a uptick in wage growth, which stoked expectations for a faster pace of inflation, raising the prospect of an interest rate hike. GBP/USD was quoted at 1.4272 on Thursday, up 0.22%.
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