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US dollar firms on escalating US-Sino trade conflict

US dollar firms on escalating US-Sino trade conflict

Mubasher: The US dollar steadied on Friday against a basket of currencies, as the latest turn of trade tensions between the US and China dampened investor appetite.

 Moreover, bearish emerging market currencies has have also given a boost for the greenback.

The US dollar index, a tracker of the currency against six major peers, was little changed at 94.721. Overnight, the index ticked up about 0.15%, marking its first gain since five days.

By 12:24 pm GMT, the index went up 0.07% to 94.7920.

As per usual, the US dollar tends to attract safe haven bids in times of market turbulence and political disputes. The currency found support as investors anticipated the next round of the trade conflict between Washington and Beijing.

US President Donald Trump said that he is prepared to levy duties on another $200 billion in Chinese imports as soon as the period for public comment on the measures ends in the coming week, Bloomberg News reported on Thursday.

“There is an ongoing trend to buy the dollar on the trade friction theme, which has negatively affected emerging market currencies and in turn fuels the dollar's rise,” Tokyo-based IG Securities senior foreign exchange (FX) strategist Junichi Ishikawa said.

The euro (EUR) went down 0.1% against the dollar to $1.1662, following a 0.3% overnight loss. The single currency has seen losses this month on the back of Turkish lira (TRY) plunge, which shed 3% of its value against the greenback on Thursday.

At 12:39 pm GMT, the EUR/USD pair fell 0.29% to $1.1637.

“The euro has also taken hits, due to the euro zone's perceived exposure to emerging market economies,” Ishikawa added.

By 12:39 pm GMT, the GBP/USD pair went down 0.22% to $1.2980. 

However, the Swiss franc (CHF) rose 0.10% against the US dollar by 12:47 pm, but the Swedish krona (SEK) fell 0.02% to SEK 0.1096.