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Forex - Dollar index little changed amid global tensions

Investing.com -

Investing.com - The dollar was little changed against the other major currencies on Wednesday, as fresh tensions between the U.S. and North Korea dampened market sentiment, while recent upbeat U.S. data continued to support the greenback.

USD/JPY dropped 0.53% to a two-month low of 109.74 after U.S. President Donald Trump said North Korea would be "met with fire and fury" if it continued its threats.

Pyongyang replied it was "carefully examining" a plan to strike Guam, where a U.S. military base is located.

Meanwhile, USD/CHF tumbled 1.03% to 0.9643 and EUR/CHF lost 1.16% to trade at 1.1314.

The Swissie's move against the euro marked the largest one day change since the Swiss National Bank shocked markets when it scrapped its currency peg with the single currency in January 2015.

The dollar was higher against the euro, with EUR/USD down 0.16% at 1.1733, while GBP/USD edged up 0.10% to 1.3003.

The greenback remained mildly supported as data on Tuesday reinforced optimism over the strength of the U.S. job market sparked by Friday's positive nonfarm payrolls report.

The U.S. Labor Department said on Tuesday that the number of job openings, excluding the farming industry, settled at a record-high 6.163 million in June from 5.702 million a month earlier.

The strong numbers added to expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.

Investors were now eyeing U.S. inflation reports later in the week for indications of whether the recovery in the dollar is sustainable in the longer term.

The Australian and New Zealand dollars were weaker, with AUD/USD down 0.34% at 0.7887 and with NZD/USD easing 0.08% to 0.7324.

Reserve Bank of Australia Assistant Governor Christopher Kent said on Wednesday that the Aussie's recent appreciation mainly reflects the decline of the U.S. dollar in response to an unwinding of the so-called "Trump Trade".

Last week, RBA Governor Philip Lowe warned that the rising Australian dollar had become a threat to growth, inflation and employment.

A few days later, the central bank cut Australia's growth forecasts to 2.5% from 3.0% for 2017.

Meanwhile, USD/CAD edged up 0.08% to trade at 1.2676, not far from Monday's three-week high of 1.2714.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was steady at 93.44, still close to Friday's one-week high of 93.64.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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