Yahoo Finance Dollar Slides Despite Renewed U.S.-North Korea Summit Hopes
Investing.com - The dollar opened the week by sliding against other Asian currencies, giving up gains from last week.
After rising to this year’s high of 94.21 on Friday, the U.S. dollar index, which measures the value of the dollar against a basket of six major currencies, fell during Monday morning trade in Asia as the market dealt with the developments over a U.S.-North Korea summit.
The U.S. dollar index stood at 93.87, down 0.36%, at 11:42PM ET (03:42 GMT).
Geopolitics continued to be the directional driver for the dollar and the yen. U.S. President Donald Trump appeared to confirm his summit with North Korean leader Kim Jong-un is now back on track, just a few days after suddenly canceled a meeting with North Korean leader Kim Jung Un last week.
“Our United States team has arrived in North Korea to make arrangements for the Summit between Kim Jong Un and myself,” Trump said in tweet on Sunday afternoon.
“I truly believe North Korea has brilliant potential and will be a great economic and financial Nation one day,” Trump added. “Kim Jong Un agrees with me on this. It will happen!”
Meanwhile, Kim Jong Un agreed to hold talks with the U.S., according to South Korean President Moon Jae-in, who met with Kim on Saturday after the North Korean leader requested a casual meeting.
“Kim, once again, made clear his intent on complete denuclearization of the Korean Peninsula,” Moon told reporters in Seoul. “Kim said he’ll end the history of war and confrontation and cooperate to bring peace and prosperity through a successful North Korea-U.S. summit.”
After the initial reaction to the shift in geopolitical concerns, dollar traders are also watching closely economic data due this week in the U.S., which includes GDP growth figures on Wednesday and the Non-Farm Payrolls report on Friday.
The USD/JPY pair gained 0.02% to 109.40. While the pair was rising slightly in late morning, risk aversion increased demand for the yen overall. Investors who bought the yen to avoid risks could sell out the currency if tensions between the U.S. and North Korea ease.
In Australia, the AUD/USD pair gained 0.32% at 0.7571.
In China, the People's Bank of China set the set the reference rate for the yuan against the dollar, the mid-point from which the currency is allowed to trade, at 6.3962 versus the previous day's 6.3867. The USD/CNY pair stood flat to trade at 6.3891.
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