Investing.com - The dollar rose to the day’s highs against a currency basket on Wednesday, reversing earlier losses after the Trump administration backed away from escalating the trade spat between Washington and Beijing.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.41% to 94.75 by 11:09 AM ET (15:09 GMT).
Market sentiment was boosted by indications that the U.S. is moving away from a blanket ban on Chinese firms investing in U.S. companies and instead is talking about using a strengthened security review process to deal with the issue.
The dollar reversed losses against the safe haven yen, with USD/JPY rising 0.32% to 110.41, off an earlier low of 109.37.
On the economic front, a report showed that the U.S. trade deficit narrowed to $64.85 billion in May. Exports rose to $143.6 billion, while imports edged up to $208.4 billion.
Another report showed that while new orders for capital goods fell unexpectedly last month, April’s figure was revised sharply higher.
The Commerce Department said that orders for non-defence goods, excluding aircraft slipped by 0.2% compared to forecasts of a 0.5% increase. April’s figure was revised to show a 2.3% increase, up from the original estimate of a 1% gain.
Also Wednesday, data showed that U.S. pending home sales fell unexpectedly in May.
The euro fell against the stronger dollar, with EUR/USD down 0.47% to 1.1593.
The pound was also lower, with GBP/USD losing 0.59% to trade at 1.3147.
Sterling remained under pressure after incoming Bank of England policymaker Jonathan Haskel said Tuesday there may be more slack in the UK economy, which would weaken the case for interest rate hikes.