Investing.com – The dollar traded roughly unchanged against a basket of major currencies as fears over a global trade war persisted amid China tariffs, while softer US manufacturing data weighed on sentiment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.01% to 89.76.
ISM non-manufacturing data for March fell to a reading of 59.3, from 60.8 the previous month, missing economists’ expectations for reading of 60.1.
MUFG Union Bank's Chris Rupkey warned that improving economic activity would likely boost inflation, strengthening the Fed’s case for more aggressively monetary policy tightening which would slightly raise the risk of a recession.
"Too high of a Fed funds rate can risk sending the economy into a downturn that no one wants to see," Rupkey said. "We haven't had much of a recession risk in our forecasts, but now maybe we should be raising those risks a little."
Downbeat economic data did little to avert risk-off sentiment amid investor concerns over escalating US-China trade tensions after Beijing unveiled retaliatory tariffs on Monday overnight.
China imposed tariffs starting Monday on US food imports including pork, fruit, nuts and wine of up to 25% as a response to the Trump administration’s new tariffs on steel and aluminium imports.
The yen – which has been used as the preferred safe-haven destination amid U.S.-China trade war tensions – continued to add to gains against the dollar, pressuring USD/JPY to Y106.03, down 0.24%.
The fall in the dollar comes amid lighter trading volumes as European markets remained shut due to the Easter holiday.
USD/CAD rose 0.21% to C$1.2923.
Add a Comment
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.