Dollar Steadies; Pressure Remains Amid Inverted Yield Curves, Trade War
Investing.com - The U.S. dollar steadied on Wednesday in Asia after falling overnight amid Sino-U.S. trade uncertainties and an inversion of the U.S. yield curve.
The U.S. dollar index that tracks the greenback against a basket of other currencies was up 0.1% to 97.998 by 12:58 AM ET (04:58 GMT).
Developments in the trade dispute between the U.S. and China remained in focus. U.S. President Donald Trump claimed Monday that Chinese officials had called and offered to resume negotiations, but Beijing claimed the next day that it was not aware the phone call took place.
Tensions between the two sides escalated late last week after both the U.S. and China announced new tariff measures and Trump appeared to threaten to use emergency powers to force U.S. companies to stop making goods in China.
Meanwhile, the yield on the benchmark 2-year Treasury note fell to 1.526% overnight, creating an “inverted yield curve,” a phenomenon that sparked concerns among traders as it has presaged several past U.S. recessions.
The AUD/USD pair slipped 0.2% to 0.6737, continuing its downward momentum after Reserve Bank of Australia Deputy Governor Guy Debelle said a weakening domestic currency was supporting the economy and that further falls would be beneficial.
A bleaker economic outlook in China, Australia's largest trading partner, was also cited as headwind for the Aussie dollar.
The NZD/USD pair fell 0.4% to 0.6335.
The USD/JPY pair rose 0.1%.
Related Articles
Rupee Loses Its Mojo in Another Ugly August for India’s Currency
Dollar pressured again as economic fears linger amid declines in U.S. yields