The greenback was flat on Monday and the safe haven yen rose, after an unexpectedly sharp fall in China’s exports increased worries over the health of the global economy.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched down 0.07% to 95.20 as of 10:25 AM ET (15:25 GMT), while USD/JPY slipped 0.26% to 108.24.
Chinese exports fell by the most in two years in December, while imports also declined. The numbers increased worry that new U.S. tariffs on Chinese goods are hurting China’s economy. Separately, data also showed that China had its biggest-ever trade surplus with the U.S. last year, which could hurt ongoing trade negotiations with the White House.
The dollar has fallen in recent weeks, on increasing expectations that the Federal Reserve will hold off from further interest rate hikes for now. Fed Chairman Jerome Powell reiterated last week that the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable.
Elsewhere, sterling recovered slightly after reports that UK Prime Minister Theresa May was preparing a fresh attempt to get support for her Brexit deal from rebels in her party, by trying to limit the time that the UK will have to stay in line with EU regulations after it leaves the bloc. She is still expected to lose a key vote in parliament on the deal scheduled for Tuesday.
GBP/USD inched up 0.15% to 1.2859.
The euro was mostly flat, with EUR/USD at 1.1463.
Both currencies had gained around 1.5% versus the dollar last week as risk sentiment improved on hopes for both a U.S.-Sino trade deal and more aggressive stimulus from Chinese policymakers to support its ailing economy./investing.com