- Euro under pressure as ECB seen holding rates into H2 2019
- Dollar steadies on trade tension, further U.S. rate hikes
- Chinese yuan falls to 5-month lows in offshore market
(Updates market action, changes dateline; previous LONDON)
Anxiety about a global trade war spurred demand on Monday for the Japanese yen and Swiss franc, while the euro remained under pressure due to a dispute in Germany's governing coalition and the European Central Bank seen holding interest rates into 2019.
The dollar was supported by some safe-haven demand and signals from the Federal Reserve that it would increase overnight borrowing costs due to a tightening labor market and rising inflation.
The ongoing trade dispute between the United States and China knocked the yuan CNH=D3 to 6.4600 per dollar, its weakest in five months in the offshore market.
On Friday, the White House enacted tariffs on $50 billion in Chinese goods. Beijing quickly responded with a 25 percent levy on 659 U.S. products, ranging from soybeans and autos to seafood.
"It's tough to say whether it will spiral further because it's so fluid. It does weigh on sentiment at times," said Eric Viloria, currency strategist at Wells Fargo Securities in New York. "Our base case is that there won't be a trade war."
The yen was up nearly 0.2 percent against the dollar at 110.45 yen JPY= and almost 0.3 percent higher versus the euro at 128.14 yen EURJPY= in early U.S. trading.
The Swiss franc notched 0.3 percent increases against the greenback and the euro at 0.9946 franc CHF= and 1.1539 euros EURCHF= , respectively.
The dollar was flat against the euro at $1.1605 EUR= after the Fed flagged more rate hikes are coming and the ECB signaled it will likely keep rates near a record low into the summer of 2019.
The euro has steadied after on Thursday suffering its biggest one-day drop against the dollar since Britain voted to leave the European Union two years ago.
Tensions with the governing coalition in Germany also weighed on the single currency. Chancellor Angela Merkel's Bavarian allies may defy her by implementing a plan to limit immigration at the German border and risk destabilizing her three-month-old coalition.
The dollar is "in a consolidation phase in the near term," Viloria said. "People are looking for economic data that show more improvement outside the U.S."
======================================================== Currency bid prices at 10:00AM (1400 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1602 $1.1607 -0.04% -3.28% +1.1624 +1.1566 Dollar/Yen JPY= 110.4300 110.6600 -0.21% -1.99% +110.7400 +110.3100 Euro/Yen EURJPY= 128.15 128.43 -0.22% -5.20% +128.6100 +127.8300 Dollar/Swiss CHF= 0.9946 0.9974 -0.28% +2.08% +0.9990 +0.9942 Sterling/Dollar GBP= 1.3239 1.3283 -0.33% -2.02% +1.3285 +1.3227 Dollar/Canadian CAD= 1.3190 1.3199 -0.07% +4.87% +1.3207 +1.3160 Australian/Doll AUD= 0.7437 0.7440 -0.04% -4.67% +0.7456 +0.7426 arEuro/Swiss EURCHF= 1.1542 1.1576 -0.29% -1.26% +1.1574 +1.1539 Euro/Sterling EURGBP= 0.8762 0.8736 +0.30% -1.36% +0.8779 +0.8729 NZ Dollar/Dolar NZD= 0.6945 0.6948 -0.04% -1.99% +0.6956 +0.6921 Dollar/Norway NOK= 8.1415 8.1466 -0.06% -0.80% +8.1799 +8.1216 Euro/Norway EURNOK= 9.4488 9.4588 -0.11% -4.06% +9.4702 +9.4337 Dollar/Sweden SEK= 8.8313 8.7824 +0.48% +7.68% +8.8698 +8.7863 Euro/Sweden EURSEK= 10.2487 10.1997 +0.48% +4.16% +10.2788 +10.2000 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Euro positions http//reut.rs/2JMWIA2World FX rates in 2018 http://tmsnrt.rs/2egbfVh
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