USD Moves Higher Amid Trade War Escalation
The US dollar continues to strengthen versus major currencies, as trade tension between the US and China is escalating. The dollar index, which measures the greenback’s strength against a basket of six major currencies, grew by 0.08% to 95.08. Initially, the USD was boosted after the Fed left interest rates unchanged on Wednesday, as expected.
Talks between the world's two largest economies are at an impasse in the trade spat, with both sides continuing to threaten new tariffs. The Trump administration plans to propose 25% instead of 10% on $200 billion of imported Chinese goods. China has responded that it would retaliate if the US continues to impose fresh trade tariffs.
The Chinese offshore yuan was near a 15-month low due to trade war fear, with the USD/CNH pair up 0.22% to 6.8962. The dollar also rose versus Japanese yen to 111.71. The euro was down with the EUR/USD pair falling by 0.06% to 1.1577. The British pound remains weak after yesterday’s rate hike of the Bank of England. The GBP/USD pair fell by 0.17% to 1.2996.