On Tuesday, the greenback fell compared to its peers as United States policymakers and headstrong retaliation from China kept concerns alive regarding the trade conflict between the two biggest economy in the world which weakened support for the dollar.
Attentions are mostly focused on President Xi Jinping of China, who is expected to give his speech at a conference in Boao, China later on Tuesday.
This will mark the Chinese president’s first public announcement of his remarks about the lingering tariff feud. Investors are cautious regarding the possible overall effect of the president’s sentiments on the financial markets.
Markets around the world took a serious blow the previous week as United States president Donald Trump chose to escalate his squabble with China, reigniting concerns among investors about the effects of a tariff war on the global economy.
Versus the yen, the greenback was mainly on the defensive. The yen is considered as a safe haven amid market turmoil and political tensions.
The dollar was down by 0.05 at 106.740 yen following a series of modest overnight declines. The greenback was on track for its third consecutive session of losses against the Yen.
Daiwa Securities senior currency strategist Yukio Ishizuki stated that tensions still persist where China and the U.S. are still exchanging threats. Algo-driven accounts are heavily reliant to each development and can shift equity market which in turn affect currencies.
Ishizuki added that geopolitical risks are also negatively affecting the dollar versus the yen, on worries that U.S. – Russia relations could deteriorate over the issue in Syria.
The dollar index, which tracks the greenback against its peers, experienced slight movement at 89.829 following its loss of 0.3 percent on Monday.