TOKYO (Reuters) – Pressure was back on the dollar on Wednesday, as nagging fears the Sino-U.S. trade war will drag on and severely hurt economic growth led to yet another slide in U.S. bond yields.
The dollar index against a basket of six major currencies stood little changed at 98.013 after dipping 0.1% overnight.
Greenback - Footing - Week - Treasury - Yields
The greenback started on a shaky footing this week, but then recovered as safe-haven Treasury yields bounced from multi-year lows after U.S. President Donald Trump softened his tone against China and predicted the two countries would be able to reach a trade deal.
But optimism on trade negotiations wilted as China’s foreign ministry dismissed U.S. suggestions that there had been contact between the two sides, and said it hopes Washington can stop its wrong actions and create conditions for talks.
Dollar - Peers - Yen - Boost - Falls
The dollar’s peers, notably the safe-haven yen, got an additional boost as falls in long-term Treasury yields deepened the inversion of the U.S. yield curve, a phenomenon that has presaged several past U.S. recessions.
“The markets have pulled out of the latest round of chaos,” said Takuya Kanda, general manager at Gaitame.Com Research Institute, referring to the tumult in global markets at the end of last week when Washington and Beijing announced fresh ****-for-tat tariffs in a further escalation of their trade dispute.
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