Yahoo Finance U.S. Dollar Rises, Yen Falls; All Eyes on G-20
Investing.com - The U.S. dollar rose while the Japanese yen fell on Thursday in Asia ahead of the highly anticipated G-20 summit that is set to kick off tomorrow.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.2% to 95.875 by 1:00 AM ET (05:00 GMT).
U.S. President Donald Trump warned on Wednesday that additional tariffs could be imposed on Chinese goods if he is not happy with the progress made in trade talks this weekend.
His comments came after Treasury Secretary Steven Mnuchin said he thinks “there is a path” for Trump and Chinese leader Xi Jinping to make a trade deal.
“We were about 90% of the way there [with a deal] and I think there’s a path to complete this,” he said. “The message we want to hear is that they want to come back to the table and continue because I think there is a good outcome for their economy and the U.S. economy to get balanced trade and to continue to build on this relationship.”
“I’m hopeful that we can move forward with a plan,” Mnuchin added. “President Trump and President Xi have a very close working relationship. We had a productive meeting at the last G-20.”
The safe-haven yen fell after his comments. The USD/JPY pair gained 0.3% to 108.06.
The two leaders will meet on Saturday morning to discuss trade-related issues, the White House confirmed.
“At minimum, investors are (hoping) that the trade talks will resume after this weekend’s meeting between the two leaders. We think they will but President Trump is extremely difficult to predict,” Kathy Lien, managing director of foreign exchange strategy for BK Asset Management, wrote in a note that was cited by CNBC.
The greenback was under some pressure earlier this week as markets dialled back expectations for aggressive rate cuts after Federal Reserve Chairman Jerome Powell said the central bank is "insulated from short-term political pressures," pushing back against Trump's demands for a significant rate cut.
Overnight, Trump told Fox News that Powell was doing "a bad job" in not cutting rates, and compared him to European Central Bank President Mario Draghi, who said last week that the Eurozone economy would need further stimulus if inflation failed to pick up.
"We should have Draghi instead of our Fed person, you know," Trump said.
The AUD/USD pair and the NZD/USD pair were up 0.2% and 0.1% respectively.
The USD/CNY pair was little unchanged at 6.8787.
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