As fears over a simmering trade spat between the U.S. and China eased after Chinese President Xi Jinping promised to lower import tariffs, the dollar rose against the yen on Tuesday. “China will lower import tariffs on vehicles, encourage imports and strengthen the protection of intellectual property”, said Xi, speaking at the Boao Forum for Asia.
“A Cold War mentality, zero-sum thinking, and isolationism was out of place in today’s world and only peaceful development and cooperation could bring results”, said also Xi. The remarks helped soften investor jitters over the ongoing tit-for-tat tariff dispute, which investors had feared might escalate into a full blown trade war between the world’s top two economies.
At 03:18 AM ET (07:18 AM GMT), USD/JPY was up 0.27% to 107.07 after rising as high as 107.25 overnight.
The currency which investors tends to sought out during times of political or economic uncertainty, the safe haven yen, had gained in the previous two sessions. Losses in the yen were held in check among geopolitical concerns. Markets fear that Russia – U.S. relations could deteriorate among heightened tensions in the wake of a suspected chemical weapons attack in Syria.
With AUD/USD rising 0.38% to 0.7726 and NZD/USD advancing 0.48% to 0.7341, the risk sensitive Australian and New Zealand dollars were higher.
While with EUR/USD last at 1.2322, the euro was almost unchanged not far from Monday’s one-week high of 1.2330.
After European Central Bank President Mario Draghi said the declines in stock markets this year has not materially impacted euro zone financial conditions, indicating that policymakers are not overly concerned about the recent market volatility, the single currency was buoyed up on Monday.
With EUR/JPY up 0.29% to 131.92, The euro was also higher against the yen. Sterling was steady, with GBP/USD last at 1.4148.
The measure of the greenback’s strength against a trade-weighted basket of six major currencies, which is U.S. dollar index, edged up 0.09% to 89.60 after ending the previous session down 0.28%.
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