Investing.com – The u.s. dollar traded Monday at a low of a week against a basket of currencies. The yen and the swiss franc, regarded as active shelters in times of uncertainty, have gained ground due to the escalation of trade tensions in the world.
With the position confrontation of the us administration on trade is expanding to countries other than China, and with the threats of China’s counter-measures in the course of the weekend, the market began to anticipate a sharp slowdown of global growth. These fears have translated into a decline of 11% in the price of oil since Thursday.
The authorities in the united states and mexico are preparing for discussions later in the day, after the american president Donald Trump has threatened to impose customs duties on all mexican imports in the context of a dispute growing on migration.
“The information mexican are quite powerful. Nobody expected really it is like China,” said Chris Weston, head of research at liquid markets, a currency brokerage based in Melbourne. “Mexico is a large trading partner of the United States,” he said.
The dollar was down 0.4% against the swiss franc to 0,9961 at 09h45 and was 108,22 against the yen after flirting with the lows of four months of 108,08 during the night.
On Friday, the japanese currency had registered its biggest rise daily for over two years, marking a rise of a little over 1.2% during the session.
The yen is considered a safe-haven in times of geopolitical turbulence and fiscal, Japan is the largest creditor country of the world.
The mexican peso, affected by the sudden threat to impose tariffs of Trump on Friday, has found some stability, trading at 19,6373 for a dollar, after tumbling 2.5% on Friday.
A top chinese official and trade negotiator said on Sunday that Washington could not exert pressure to impose a trade agreement with China and denounced what he called tactics of “coercion” in the United States. Media chinese officials have also announced that the authorities were preparing a survey on FedEx (NYSE: FDX).
“The markets are trying to catch up with the negative news concerning the trade relations for the time being,” said Kumiko Ishikawa, a senior analyst at Sony Financial Holdings. “They are beginning seriously to respond to the trade tensions extended without taking risks.”
The dollar has plunged after the reference indexes 10-year Treasury u.s. has reached 2.12 per cent on Monday, its lowest level since September 2017.
Government bonds German 10-year fell to -0,20%, the lowest level of all time, with fears that the ruling coalition collapsed following the resignation of Andrea Nahles, head of the social democratic party, the junior partner of the coalition.
Against a basket of six major currencies, the dollar was not far from a hollow of the week 97,692, although it is still up 1.5% for the year.
The euro was little changed at 1.1173$ – its first rise in five sessions.
The australian dollar was 0,6945 after having reached a peak of 0,6959 in three weeks, thanks to an activity of a chinese plant slightly better than expected in may.
The gain of the aussie, stepped in despite a New York Times report, citing sources, according to which Trump would be getting ready to impose tariffs on australian imports in response to an increase in exports of aluminium in the United States during the last year.
–Reuters contributed to this report