Financials

US dollar slides amid escalating trade tensions

US dollar slides amid escalating trade tensions

New York: The US dollar index fell against most other major currencies as escalating trade tensions between China and the US weighed on the market, amid weaker-than-expected March jobs report.

In late New York trading on Friday, the euro rose to $1.2285 from $1.2236 in the previous session, and the British pound increased to $1.4085 from $1.4001 in the previous session, Xinhua news agency reported.

The Australian dollar was down to $0.7670 from $0.7682.

The US dollar bought 106.87 Japanese yen, lower than 107.44 Japanese yen of the previous session. The US dollar fell to 0.9587 Swiss franc from 0.9635 Swiss franc, and it climbed to 1.2778 Canadian dollars from 1.2761 Canadian dollars.

US President Donald Trump had threatened to slap tariffs on $100 billion of imports from China, ratcheting up trade tensions and plunging economic growth into uncertainty.

China will fight “at any cost” and take “comprehensive countermeasures” if the US continues its unilateral, protectionist practices, a spokesperson with the Chinese Ministry of Commerce said on Friday.

The moves came after both sides earlier this week unveiled a list of products worth $50 billion imported from the other side that will be subject to higher tariffs.

The disappointing nonfarm jobs report also dented investor sentiment. US total nonfarm payroll employment edged up by 103,000 in March, way below market consensus of an increase of 193,000 jobs, the US Labor Department said on Friday. The unemployment rate was unchanged at 4.1 per cent in March.

“Given the Fed’s fear of the Phillip’s curve, March’s modest employment growth is likely to be hailed as good news among the denizens of the Eccles building after February’s outsized gain. Yields are down about 3bp along the entire curve, suggesting the traders are considering the possibility of both a slower pace of tightening and a lower cycle high for fed funds,” said Chris Low, chief economist at FTN Financial.

Investors also paid close attention to the latest speech of Federal Reserve Chairman Jerome Powell, who said on Friday that the central bank will likely need to keep raising interest rates to keep inflation under control.

The dollar index, which measures the greenback against six major peers, decreased 0.39 per cent at 90.106 in late trading.

–IANS