Forex – Dollar Surges to Day’s Highs as Trade Tensions Escalate

© Reuters. Dollar surges to day’s highs as trade tensions escalate – The dollar rose to the day’s highs against a currency basket on Tuesday and pared back some losses against the safe haven yen as heightened trade tensions between the U.S. and China soured risk appetite.

The , which measures the greenback’s strength against a basket of six major currencies, was up 0.48% to 94.86 by 08:03 AM ET (12:03 GMT), holding below Friday’s eleven-month high of 95.13.

China warned Tuesday that it would retaliate swiftly after U.S. President Donald Trump threatened to impose a of Chinese imports.

The moves exacerbated worries among investors that the world’s two largest economies could descend into an all-out trade war.

Uncertainty over the future of the North American Free Trade Agreement and concerns over tariffs that the Trump administration imposed on also added to investor nerves.

The dollar pared back some losses against the safe haven yen, with last at 109.87, off 0.62% for the day, after falling to a one week low of 109.55 earlier.

The Japanese currency is often sought by investors in times of geopolitical tensions and market turmoil.

The euro was trading at three-week lows against the stronger yen, with down 1.34% to 127.12.

The euro was also sharply lower against the dollar, with falling 0.72% to 1.1538.

The pound dropped to seven month lows the dollar as trade fears and weighed, with down 0.69% to 1.3153.

Elsewhere, the Australian and Canadian dollars plumbed their lowest levels in a year, with down 0.98% to 0.7350, while climbed 0.57% to 1.3277.

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