Forex – Dollar Recovers As U.S. Attack on Syria Not Immediate


© Reuters. The dollar was mixed as geopolitical outlook remained uncertain

Investing.com – The dollar was weighed down to oscillate around 89.20, this week’s lowest range, in Asia on Thursday morning as U.S. threat of military action in Syria deepened the geopolitical conflicts. Asia’s currency market was dominated by the escalating geopolitical tensions in the Middle East that may get key world players involved, after the Sino-U.S. trade disputes that could translate into a global trade war.

The that tracks the greenback against a basket of six major currencies last stood at 89.27 at 11:07PM ET (03:07 GMT), up 0.06%. The dollar tumbled to 89.09 overnight, but gradually recovered on Thursday late morning.

Reports that U.S. President Donald Trump threatened to launch missiles at Syria were in focus overnight in Asia and hampered investors’ risk appetite, sending havens such as U.S. treasuries and the anti-risk yen higher. Later in the day, Trump reportedly did not settle on a plan after meeting with Defense Secretary Jim Mattis. The twist in the Syria crisis development improved market sentiment on Thursday morning.

The pair edged up 0.09% to 106.88. The safe-haven yen picked up overnight due to risk aversion after reports of Trump threatening military action at Syria took centre stage. But as the threat was not imminent, investor risk appetite revived and the greenback gradually recovered.

Elsewhere, the pair shed 0.01% to trade at 0.7754. The sentiment-linked Aussie slipped in late morning on a recovering dollar. In addition, Australia’s February data came at -0.2%, better than the expected -0.3%.

In China, The People’s Bank of China set the fix rate of yuan against the dollar at 6.2834 versus the previous day’s 6.2911. The pair gained 0.08% to trade at 6.2762.

Meanwhile, investors still await more developments of the trade spat between the world’s two largest economies for cues. Chinese President Xi Jinping’s words at Boao Forum on Tuesday were carefully chosen and neutral-toned. Though investors were relieved on Tuesday, the Sino-U.S. trade disputes remain and could continue to escalate.

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