By Rae Wee
Singapore (Reuters) – The dollar recovered somewhat on Thursday thanks to an increase in American treasury yields, although currencies were traded in tight series while investors had difficulty determining the impact of an escalating global trade war on American inflation and growth.
US President Donald Trump threatened on Wednesday for further rates for goods from the European Union, because large American trading partners said they would take revenge on trade barriers that have already been built by him.
An increase in global trading tensions and concerns about American recession risks rattled the global markets and has fueled enormous volatility on the currency market, because traders between lighting and fear of the Whipsawing policy changes appear from Trump.
Markets were a bit quieter on Thursday in the early Asian session when investors got a break of the flurry of headlines about American trade policy.
The dollar rose by 0.05% compared to the yen to 148.31 and repaired part of his losses from earlier in the week when it dropped to a five -month low -point against the Japanese currency, because the fear of an economic decline in the US led a hurry to the Japanese currency as a safe haven.
The Swiss Frank ran away from the three -month peak in the same way and was the last at 0.8817 per dollar.
From data released on Wednesday, inflation rose slightly less than expected in February, but the relief it offered could be temporary because the data does not fully capture the cascade of Trump’s rates.
“What is more uncertain is the prospects for future inflation and the state of US economic activity, largely thanks to the unpredictability of American trade policy,” says James Reilly, senior markets economist at Capital Economics.
“It is these problems that stimulate markets, and (the) report gave little new insight into one of these.”
But the American treasury yields pushed higher when traders went to inflation on the line on pick-up, with the benchmark 10-year yield last stable near a top of a week at 4,3047%.
The return of two years had not changed much at 3,9866%.
That kept the dollar supported and hit the euro away from the five -month top of Tuesday, with the single currency that last achieved $ 1,0890.
Sterling tapped 0.06% to $ 1,2968, while the dollar index ran away from the five months of Tuesday and bothered at 103.57.
The Canadian dollar had not changed much to C $ 1,4372.
On Wednesday, the Bank of Canada broke its most important policy percentage with 25 basic points and expressed concern about inflationary pressure and weaker growth resulting from trade inquisitiveness and Trump’s rates.
“Rates are the inflation pressure for the global economy, which would be a nightmare for central banks … Central bankers are simply more careful and keep open for what is coming,” said Carol Kong, a currency rate at Commonwealth Bank of Australia.