SINGAPORE (Reuters)
Political shifts in France and Japan have negatively impacted both the euro and yen, while the dollar has bounced back from its earlier losses as investors express hope that the U.S. might mitigate the recent escalation in its trade conflict with China.
The dollar index, which tracks the dollar’s performance against a selection of six currencies, slightly increased to 99.002, recovering some losses incurred after President Trump declared a 100% tariff on China.
This announcement reignited concerns that Trump could impose extensive tariffs on Emancipation Day in April, causing a dip in stocks and cryptocurrencies on Friday.
“There’s a noticeable level of anxiety among traders,” commented Tim Kelleher, who heads institutional foreign exchange sales at Commonwealth Bank in Auckland. He noted that it seems Trump has softened his tone recently regarding the U.S.-China situation, following the trading adage that “Trump is always cautious.”
Earlier in the day, Trump shared a message on the Truth social network, reassuring, “Don’t worry about China. Everything will be fine! Respected President Xi just had a bad moment. He doesn’t want a Great Depression for his country, and neither do I. America wants to help China, not hurt China!!!”
Today’s market liquidity could be affected by holidays, with Columbus Day observed in the U.S. and Health and Sports Day in Japan.
The dollar rose by 0.5% against the yen, reaching 151.985 yen. This shift occurred as markets assessed the future of new Liberal Democratic Party leader Sanae Takaichi, particularly after Komeito’s departure from the ruling coalition, which diminished hopes for Japan’s first female prime minister.
As for the euro, it dropped by 0.1% to $1.1609 following the French presidency’s announcement of Prime Minister Sébastien Lecornu’s recently appointed cabinet, which includes the reappointment of President Macron’s close ally Laurent Lescure as finance minister.
The cryptocurrency market has seen fluctuations between gains and losses after Friday’s downturn, with Bitcoin trading at $115,486.04, up 0.4%. Meanwhile, gold reached a notable new high of $4,059.30, also up by 0.8%.
The offshore yuan was valued at 7.137 yuan against the dollar, maintaining a steady position at 0.1% in early Asian trading.
In early trading, the Australian dollar climbed 0.6% to $0.6513, while the kiwi rose 0.3% to $0.57345. The pound also ticked up by 0.1%, trading at $1.33415.
