Forex - Dollar Pushes Higher on Hopes for Trade Compromise
5 April 2018, 08: 28
The dollar pushed higher against a basket of the other major currencies on Thursday amid hopes that the U.S. and China will reach a compromise to overcome rising trade tensions.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.16% to 89.92 by 02:35 AM ET (06:35 AM GMT).
The dollar gained ground against the safe haven yen, with rising 0.19% to 106.98, pulling further way from the previous session’s low of 105.98.
The safe haven yen, which tends to be sought out by investors during times of political or economic uncertainty had rallied Wednesday after China announced a fresh wave of tariffs on U.S. imports, in retaliation to a Trump administration plan to impose tariffs on Chinese products.
But trade tensions eased after President Donald Trump's economic adviser Larry Kudlow said proposed tariffs on China may not actually take effect and added that there is not a trade war between the U.S. and China.
Market sentiment was also helped by hopes that the U.S. could reach a deal with Canada and Mexico over the North American Free Trade Agreement.
Investors were turning their attention to the latest U.S. employment report and comments by Federal Reserve Chairman Jerome Powell on Friday, which could help determine the direction of the dollar.
Signs of increasing wage growth could underline the case for the Fed to raise interest rates at a faster pace. Expectations of rising rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
The euro was a touch lower against the dollar, with dipping 0.11% to 1.2264.
The pound was also slightly lower against the U.S. currency, with edging down 0.1% to 1.4067.