Dollar Slips, Yen Nears Two-Month Low as China Announces Retaliation Tariffs
- 2 months ago
Investing.com - The U.S. dollar slipped, while the Japanese yen hovered near a two-month low on Wednesday as investors digested the latest trade news.
The US Dollar Index, which tracks the greenback against a basket of other currencies, was down 0.07% at 94.16 by 12:26AM ET (04:26 GMT).
The dollar slipped after Beijing announced on Tuesday retaliatory tariffs that targeted more than 5,000 U.S. products worth $60 billion. The new tariffs would take effect on Sep 24, China’s Ministry of Finance said in a statement. The country’s commerce ministry also filed a complaint to the World Trade Organization (WTO) against the U.S., according to reports.
The Trump administration previously stated that the U.S. would impose tariffs on another $267 billion of additional imports if China retaliates.
“China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me,” Trump said on Twitter. “What China does not understand is that these people are great patriots.”
Meanwhile, the Japanese yen, which is widely considered a safe asset during periods of risk aversion, weakened to near a two-month low of 113.18 earlier in the session as markets took comfort from the fact that the new U.S. tariffs were set at 10% for now rather than the previous expected 25% tariff. The USD/JPY pair last traded at 112.35, down 0.03%.
"It seems as though the markets had already priced that in after media reports that Trump is planning to introduce the new tariffs," said Shinichiro Kadota, senior strategist at Barclays.
The Chinese yuan recovered slightly after the news, but still remained near a three-week low. The USD/CNH pair fell 0.12% to 6.8552.