Forex – Dollar Falls as Turkish Lira Recovers

© Reuters. The U.S. dollar retreated on Thursday – The U.S. dollar retreated on Thursday as the lira recovered after slumping to a record low of 7.24 earlier this week.

The , which tracks the greenback against a basket of currencies, slipped 0.21% to 96.4 by 11:20AM ET (03:20 GMT).

The dollar jumped to near a 13-month peak this week as the Turkish lira crisis and concerns on China’s economy provided supported to safe-haven assets.

“Recent dollar gains reflect weakness in emerging market currencies and the euro, with ‘risk off’ driving flows into the U.S. currency,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

Meanwhile, the pair was trading 0.3% lower as . The lira surged as much as 8% against the dollar in the previous session following the news.

The Trump administration said Wednesday that Turkey’s imposition of retaliatory tariffs against the U.S. were “a step in the wrong direction,” while White House spokeswoman Sarah Sanders said U.S. tariffs announced last week will stay in place.

Elsewhere, the pair gained 0.4% to 0.7267 after China announced with the U.S. later in August. The Aussie dollar was under pressure and has fallen 8% in the past six months amid the China-U.S. trade war and the recent Turkey crisis which drove a flight to the U.S. dollar and other safe-haven assets.

“We’re No. 1 on the list of collateral damage in who really has a lot to lose if the China story goes south,” said Sally Auld, JPMorgan Chase & Co (NYSE:).’s head of fixed-income and currency strategy for Australia. “We’re a small, open economy that’s highly leveraged to trade and to China so anything that creates difficulty with global trade is bad for us by definition. It’s pretty fundamental to our economic well-being.”

The pair lost 0.51% to 6.9001, while the pair was unchanged at 110.75.

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