Dollar set for weekly losses as tensions with Pyongyang rise

The dollar index steadied at 100.590, slightly higher on the day but down 0.6 per cent for the week. — AFP picThe dollar index steadied at 100.590, slightly higher on the day but down 0.6 per cent for the week. — AFP picTOKYO, April 14 ― The dollar nursed losses today, on track for a losing week as continuing tensions in North Korea underpinned the perceived safe-haven Japanese currency.

The dollar index, which tracks the US unit against a basket of six rival currencies, steadied at 100.590, slightly higher on the day but down 0.6 per cent for the week.

US President Donald Trump said yesterday that North Korea is a problem that “will be taken care of,” as urged caution and speculation rose that Pyongyang might be on the verge of a sixth . The Pentagon declined to comment on an NBC report about possible pre-emptive action against the rogue state.

The dollar rose 0.8 per cent against the South Korean won , which last stood at 1,138.5.

In another part of the world, the US military said yesterday that it dropped “the mother of all bombs,” the largest non-nuclear device it has ever unleashed in combat, on a network of caves and tunnels used by Islamic State in eastern Afghanistan.

“The ‘mother of all bombs’ was intended to show the power of US forces to North Korea,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

“But maybe we won’t see big market moves today, because the short-term players already have put on short-dollar positions, and now everyone is just waiting for the next trigger,” he said.

The dollar edged up 0.1 per cent on the day to ¥109.15 (RM4.43), but was down 1.7 per cent for the week.

Market liquidity was thinner than usual because of this week’s Passover and Good Friday holiday observances around the world. The market for US Treasuries finished trading early on Thursday, and will be closed Friday.

The benchmark US Treasury yield skidded to its lowest levels since November yesterday, after Trump said in a Journal interview published late Wednesday that he favoured low interest rates.

He also said the dollar was “getting too strong” and would eventually hurt the US economy.

“Yields declined, and we’re seeing a softening of the dollar,” said Bill Northey, chief investment officer at the private client group of US Bank in Helena, Montana.

“It’s unique to see that level of focus coming from the White House on economic topics that haven’t usually been the purview of the administration,” he said, explaining why markets continued to focus on Trump’s remarks.

Trump also said his administration will not label China a currency manipulator in the Treasury Department’s semi-annual report on currency practices of major trading partners which is due out on Friday, backing away from a campaign promise.

The move was seen as a possible quid pro quo, suggesting it might make Beijing more inclined to help resolve the escalating row with North Korea.

“We have some US economic data later in the day, which ordinarily would likely have some affect on US yields and the dollar, but with U. markets closed, it might not have much impact,” said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.

US retail sales for March are expected to come in at a seven-month low of zero after edging up just 0.1 per cent in February.

The euro was steady on the day at $1.0611. It was up 0.2 per cent for the week, though concerns about the outcome of the April 23 first round of France’s presidential election continued to limit its upside.

Against the yen, the euro slumped as low as 115.72 on Thursday, its lowest level since November, and was poised to drop 1.5 per cent for the week. It last stood at 115.85 yen, up 0.1 per cent. ― Reuters

Source: The Malay Mail Online

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