US dollar weakens amid concerns over trade tensions with China

Washington: The US dollar on Friday (local time) fell sharply amid concerns over country’s recent trade tensions with China which escalated after the latter said it would impose retaliatory tariffs on additional US products.

The dollar index, which measures the greenback against six major peers, decreased 0.55 per cent at 97.6408 in late trading, Xinhua news agency reported.

On Friday, China announced its plans to impose an additional tariff on USD 75 billion worth of US products, in retaliation for Trump’s threats to impose new duties on Chinese imports next month. The new duties would be implemented in two batches – the first from September 1 and the second from December 15, according to South China Morning Post.

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In late New York trading, the euro rose to 1.1145 dollars from 1.1085 dollars in the previous session, and the British pound increased to 1.2284 dollars from 1.2257 US dollars in the previous session. The Australian dollar was down to 0.6752 dollar from 0.6757 dollar.

The U.S. dollar bought 105.29 Japanese yen, lower than 106.41 Japanese yen of the previous session. The U.S. dollar fell to 0.9742 Swiss francs from 0.9836 Swiss francs, and it was down to 1.3293 Canadian dollars from 1.3299 Canadian dollars.

Based on laws and approved by China’s State Council, a total of 5,078 US products will be subject to additional tariffs of 10 per cent or 5 per cent.
China’s imposition of additional tariffs is a forced response to US unilateralism and trade protectionism, the Council said.

As market angst over the US and global economic growth built up, US Treasury bills, a traditional low-risk asset, saw retreating yields throughout the day, which indicated dampened investor sentiment.

Following China’s move, US President Donald Trump on Friday pledged to retaliate against the latest round of tariffs.

In a series of tweets, Trump called on the American companies to “immediately start looking for an alternative to China,” including shifting the manufacturing of their products to the US, while also calling on major package carriers in the country to “search for and refuse” packages from China that contain the drug fentanyl.

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