The dollar slipped against the yen in Asia on Wednesday morning amid intensifying trade disputes between the U.S. and China which could hurt the global economy. In addition, the Aussie performed the best in the morning session thanks to the bullish retails sales data.
The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 89.76 at 11:15PM ET (03:15 GMT), down 0.10%. It dropped from an overnight high at 89.92 to below the 89.80 level.
Tensions continued after the U.S. proposed imposing 25% tariffs on nearly $50 billion worth of made-in-China products – around 1,300 industrial technology, transport and medical products to be particular.
More directional drivers for the dollar this week will be the U.S. payrolls data and comments by Federal Reserve Chairman Jerome Powell.
In China, the People’s Bank of China set the fix rate of yuan against the dollar at 6.2926 versus the previous day’s 6.2833. The USD/CNY pair edged up 0.06% to trade at 6.2931.
In response, the Chinese embassy in Washington said in a statement that “the Chinese side will resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against U.S. products in accordance with Chinese law.”
The USD/JPY pair eased 0.10% to 106.50. The pair saw bulls overall, climbing up from below the 106 mark since Tuesday morning. In times of economic uncertainty, the safe-haven yen attracts demand. And on the other side, the yen weakens on improving risk appetite as investors turn to riskier assets.
The AUD/USD pair surged 0.29% to trade at 0.7707. The Aussie was sent higher on Wednesday morning by the bullish February retail sales data that came in better than expected at 0.6%, beating the estimated 0.3%.