Investing.com - The U.S. dollar continued to hold against other major currencies on Friday, as trade tensions between the U.S. and China lingered.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, increased 0.08% to 95.08 as of 5:00 AM ET (9:00 GMT).
The dollar was boosted after the Fed left interest rates unchanged on Wednesday, as expected. The central bank upgraded its view on the economy, as strong U.S. economic data supports gradual rate hikes to continue.
Trade uncertainty remained on investors minds after reports that the White House plans to propose 25% instead of 10% on $200 billion of imported Chinese goods. The two largest economies in the world have been in a tit-for-tat trade war over the last few months, which has weighed heavily on markets.
China has responded that it would retaliate if the U.S. continues to impose fresh trade tariffs but with the U.S. importing more from China, investors see a trade war hurting Beijing more. The Chinese offshore yuan was near a 15-month low due to trade war fear, with USD/CNH up 0.22% to 6.8962
The dollar was higher against the safe-haven yen, with USD/JPY increasing 0.06% to 111.71. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
The euro was down with EUR/USD inching down 0.06% to 1.1577.
Sterling was also lower with GBP/USD falling 0.17% to 1.2996, after the Bank of England decided to increase interest rates on Thursday despite Brexit concerns.
Australian dollar was also under pressure due to Sino-U.S. trade tensions with AUD/USD flat at 0.7358 while NZD/USD inched down 0.27% to 0.6738. The loonie was higher against the greenback, with USD/CAD down 0.01% to 1.3021.