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Safe-haven Yen Falls as Trump Delays China Tariffs, Sparks Risk Rally

Investing.com - The Japanese yen, which is widely considered as a safe-haven currency, fell on Thursday in Asia as encouraging signs in U.S.-China trade situation improved investor sentiment.

The USD/JPY pair gained 0.2% to 108.03 by 11:59 AM ET (03:59 GMT).

U.S. President Donald Trump said he will delay a planned tariff hike on Chinese goods by two weeks as a gesture of goodwill after China exempted a range of U.S. goods from its own tariffs.

The move eased tensions between the two sides as they prepare for in-person talks in Washington next month. Asian stocks traded mostly higher following the news, but the safe-haven Japanese yen suffered.

Meanwhile, the Chinese yuan gained against the U.S. dollar as the USD/CNY pair fell 0.3% to 7.0889.

In other news, Trump once again accused the Federal Reserve for not slashing interest rates as much as he would like.

The central bank should cut interest rates to zero or less, the president said, noting that negative rates would save the U.S. government money on its debt.

Another event that will be in focus this week is the upcoming meeting of the European Central Bank, where markets expect the central bank to cut rates and provide more support for the economy.

The EUR/USD pair was little changed at 1.1010. The GBP/USD pair was also near flat at 1.2330.

The AUD/USD pair and the NZD/USD pair rose 0.2% and 0.3% respectively.

The U.S. Dollar index that tracks the greenback against a basket of other currencies was unchanged at 98.650.

The dollar traded higher earlier in the day after the Labor Department said its producer price index for final demand increased 0.1% last month, in line with economists' forecasts. In the 12 months through August, the PPI rose 1.8%, ahead of forecasts of 1.7%.

The core PPI, which excludes food and energy prices, rose 0.3% in August, more than the 0.2% rise forecast. The year-on-year rise was 2.3%, edging above estimates of 2.2%.

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