Dollar slips as Taiwan dollar surge sparks revaluation talk
The dollar slipped anew on Monday as a meteoric surge in its Taiwanese counterpart stoked speculation some Asian countries were prepared to engineer revaluations of their currencies to win U.S. trade concessions.
The Taiwan dollar climbed more than 3% to 29.654 per U.S. dollar, adding to a record 4.5% jump on Friday and taking it to near three-year highs.
While Taiwan's central bank has denied the White House was pressing for a rise in some Asian currencies as part of a trade deal, markets were sensing a shift anyway.
China's yuan duly hit its highest in almost six months at 7.1879 per dollar as investors wagered Beijing might let its currency strengthen as part of Sino-U.S. trade talks, though negotiations still seemed distant.
While the Chinese Commerce Ministry has indicated Beijing was evaluating an offer from Washington to hold talks over Trump's 145% tariffs, the two sides still seem far apart.
In a TV interview aired on Sunday, President Donald Trump reiterated that he believed China wanted to do a deal, but offered no details or timeline.
Trump did say he would not attempt to remove Federal Reserve Chair Jerome Powell, but also repeated calls for lower interest rates and called the Chair a "stiff".
The Fed meets on Wednesday and is widely expected to leave rates steady following a solid March payrolls report.
Markets now imply only a 37% chance of a Fed cut in June, down from 64% a month ago. Goldman Sachs and Barclays both shifted their cut calls to July from June.
Yet it was notable the dollar had only got a limited lift from the jobs data and was struggling to keep the gains, with turnover in Asia thinned by holidays in Japan and China.
The euro edged up 0.4% to $1.1343 , and away from last week's low at $1.1266, while the dollar index dipped 0.2% to 99.635 .
The dollar eased 0.6% to 144.03 yen , and away from Friday's top around 145.91. A deepening dive in oil prices was a boon for Japan's trade account as it imports all its fuel.
Down Under, the Australian dollar held firm in the wake of Saturday's election which saw the Labor party's Anthony Albanese claim a historic second term as prime minister.
The Aussie edged up to $0.6472 , having hit a five-month high after the U.S. jobs report boosted risk appetite globally.
Source : Reuters
