Dollar Slips, Sterling Wallows at 1-Year Lows

Aug 08, 2018

The dollar edged lower against a currency basket on Wednesday, sliding for a second day as trade tensions faded, while sterling wallowed near one-year lows, pressured lower by Brexit uncertainty.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, touched a low of 94.82 and was at 94.98 by 04:11 AM ET (08:11 AM GMT) after slipping 0.2% on Tuesday.

The index touched the highest level in nearly a year last week, bolstered by rising U.S. interest rates and fears over the impact of trade conflicts.

The recent rally in the dollar has faded as investor concerns over global trade tensions waned, dampening safe haven demand for the greenback.

Trade tensions remained in focus after the Trump administration said Tuesday that it will impose 25% tariffs on another $16 billion of goods it imports from China later this month.

The move is the latest by Washington to pressure China into negotiating trade concessions after it imposed tariffs on $34 billion of goods in July, prompting pledges from China to retaliate.

The dollar was weaker against the yen, with USD/JPY losing 0.38% to trade at 110.96 ahead of expected bilateral trade talks between the U.S. and Japan in Washington on Thursday.

The yen also gained momentum against the euro, with EUR/JPY losing 0.46% to trade at 128.61.

The euro was a touch lower against the dollar, with EUR/USD dipping 0.1% to 1.1586.

The single currency rose to its highest levels since November against the pound, with EUR/GBP advancing 0.17% to 0.8975.

Sterling remained under pressure amid worries over the growing prospect of a no-deal Brexit.

GBP/USD hit a low of 1.2905, the weakest since August 31, 2017 and was last at 1.2909, off 0.22% for the day.

Meanwhile, China’s yuan slid against the dollar, with the currency, which is usually closely controlled by Beijing, at 6.8340 in offshore trading.