Investing.com - The dollar slid to a four-week low on Wednesday as markets remain concerned over the intensifying China-U.S. trade war.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, slipped 0.02% to 94.61 by 1:10AM ET (05:10 GMT). The index dipped to 94.434 overnight in the U.S. session, its lowest since July 31.
Minori Uchida, chief currency strategist at MUFG Bank in Tokyo, said investors were closely watching developments in the Sino-U.S. trade dispute as the dealine for public comment on U.S. President Donald Trump’s tariffs on another $200 billion of Chinese goods is due early September.
Low-level trade talks between China and the U.S. ended last week with little progress made, while Trump is reportedly meeting his Chinese counterpart Xi Jinping later this year to further discuss trade issues.
The USD/CNY pair rose 0.2% to 6.8153 on Wednesday as U.S. Treasury Secretary Steven Mnuchin praised China for supporting the yuan just a week after President Donald Trump accused China of manipulating its currency.
"Their currency is more of a controlled currency than other markets that are free access," Mnuchin said in an interview with CNBC on Tuesday. "But if they go in and support their currency, that is not currency manipulation."
"If they [China] let their currency weaken, either for structural reasons or for actual manipulation, that is something that is manipulation," he added.
His comments came a week after Trump said China is manipulating yuan to make up for having to pay tariffs on imports imposed by the U.S.
Meanwhile, the USD/JPY pair traded 0.03% lower to 111.17.
The AUD/USD pair was little changed at 0.7336 after losing about 0.1% on Tuesday, and the NZD/USD was unchanged at 0.6708.