Forex - Dollar Hits Day’s Highs; Sentiment Remains Fragile
Published Apr 12, 2018 05:56AM ET
Dollar hits day’s highs as sentiment remains fragile
Investing.com - The dollar rose to the day’s highs against a basket of the other major currencies on Thursday, but market sentiment remained fragile amid fears over a possible military clash between U.S. and Russian in Syria.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.24% to 89.43 by 05:50 AM ET (09:50 AM GMT), pulling away from Wednesday’s two week lows of 89.04.
After a Russian diplomat said Wednesday that his country’s forces would shoot down U.S. missiles launched at Syria, U.S. President Donald Trump warned Russia to "get ready” for imminent military action in response to an alleged chemical attack over the weekend.
Trump’s comments raised the prospect of direct military conflict between the U.S. and Russia in Syria, escalating tensions in the Middle East.
The dollar found support after Wednesday’s minutes of the Federal Reserve’s March meeting showed that officials believe that the economy will continue to firm and that inflation will rise towards their 2% target in the coming months.
Some investors believed the minutes bolstered the case for a faster pace of monetary tightening by the U.S. central bank.
The minutes also showed that officials remained wary about the impact of the Trump administration's trade and fiscal policies.
The dollar pushed higher against the yen, with USD/JPY rising 0.14% to 106.93, but gains were held in check. The safe haven yen is often sought out by investors in time of market turmoil and political tensions.
Rising geopolitical tensions pulled focus away from fears over a U.S.-China trade war, which had gripped global financial markets in recent weeks.
The euro fell to the day’s lows, with EUR/USD down 0.19% to 1.2343.
Demand for the single currency continued to be underpinned after comments by European Central Bank policymakers earlier this week underlined expectations that the bank is on track to normalize monetary policy.
The pound edged lower against the U.S. currency, with GBP/USD last at 1.4166.
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Written By: Investing.com
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