Data lifts dollar as Trump talks tariffs
The dollar hit a three-week high against the yen on Tuesday and was firm across the board after some strong U.S. services data and cautious optimism on the tariff front.
President Donald Trump said not all of his threatened levies would be imposed on April 2 and some countries may get breaks, which helped the dollar and the mood on Wall Street overnight by soothing some fears about a possible slowdown in U.S growth.
The dollar was last up at 150.56, having pulled overnight above 150 yen. It rose to a three-week high of 150.92 yen in the Asia morning.
The lack of momentum in trading, however, showed market uncertainty about tariffs and pushing the dollar any higher.
A strong services component in S&P Global's flash U.S. PMI figures pushed up U.S. yields and coincided with weakness in Japan, where services and manufacturing were both in contraction.
The yen has been a laggard for weeks even as tariff and growth worries weighed on the dollar, until last week's Federal Reserve meeting turned sentiment after the central bank indicated it was in no rush to cut interest rates.
Investors expect the Bank of Japan to go slow on monetary tightening that could bolster the yen. Minutes of the BOJ's January meeting released on Tuesday showed policymakers discussed the pace of raising interest rates.
Last week, the BOJ kept interest rates steady and warned of heightening global economic uncertainty. But many analysts still expect the BOJ's next move to come in the third quarter, most likely in July.
The dollar also hit its strongest since March 6 at $1.0781 per euro , as a powerful rally in the common currency loses steam.
It was last trading at $1.0804, while sterling hit a two-week low of $1.2883 before steadying at $1.2935 in Asia trade. The U.S. dollar index notched a fourth straight session of gains to settle at 104.3.
But with Trump vowing that automobile tariffs are coming soon and the market implications of the levies complicated by concerns about U.S. growth, the next move is not obvious.
Data from the Commodity Futures Trading Commission on Friday showed that speculators turned net bearish on the U.S. currency last week for the first time since October, though the position is close to neutral.
The Australian dollar seemed to catch support from optimism about Trump's tariff flexibility, and was steady at $0.6287. Australia's government will unveil a pre-election budget at 0830 GMT, aimed at cost of living relief.
Bitcoin hit a two-week high of $88,771 overnight but was 1.5% lower around $86, 497 in Asia. The New Zealand dollar was near its lowest levels in a week at $0.5725.
Source : Reuters
