Investing.com – The u.s. dollar was near the highest in a month against a basket of currencies on Wednesday, supported by higher yields on u.s. Treasury after the United States eased temporarily the restrictions imposed on the chinese giant telecom Huawei.
This decision was a reprieve for markets that had been shaken by fears of an escalation of the trade war between Washington and Beijing, but the feeling remained moderate, the investors monitor the growing involvement of technology companies in trade disputes.
“Trade disputes will not be resolved easily, so that risk aversion will not disappear suddenly. I think the market sentiment will improve rather gradually,” said Ayako Sera, a strategist in market at Sumitomo Mitsui Trust Bank.
At 12.50, the dollar index, which measures the greenback against a basket of six major currencies, was at 97,835, just below the summit of 97,953 reached on Tuesday, its highest level since April 26. The index is up 2% since the beginning of the year.
The dollar dipped slightly against the yen, with USD/JPY down 0.1% to 110,44, after the culmination of two weeks of 110.67 reached during the previous session.
Data released overnight showed that japan’s exports had fallen for the fifth consecutive month in April, underlining the threat that was posed by the third world economy on the trade war between the United States and China.
Sumitomo Mitsui Will be said that the weakness of the yen was due to higher yields of the u.s. Treasury, which have slowed in response to the recovery of u.s. equities.
“When yields increase, it is natural to buy the dollar. I think that the movements of the rates in US are very important,” she said.
The Treasury yield us 10-year was at 2,421%, almost unchanged for the day.
The euro was little changed, with EUR/USD at 1,1169, investors remaining cautious ahead of the european elections which are to start Thursday.
The parties eurosceptics should score good scores, which could hinder the approval of the next president and the next budget of the European Commission.
The pound sterling has plunged to its lowest level since January, with GBP/USD down 0.3% to 1,2668 while the last attempt of the first minister Theresa May to win the support for his withdrawal agreement from the EU seems to be already doomed to fail, causing further unrest on the Brexit.
–Reuters contributed to this report