Dollar steady vs yen

The dollar held steady against the yen on Monday, taking a breather after last week’s rally and as it treads cautiously amid lingering concerns over a U.S.-China trade spat.

The U.S. currency had risen against the yen last week, helped by signs China and the United States were working behind the scenes to avoid a full-blown trade war, and hopes for a diplomatic breakthrough over North Korea’s nuclear programme.

The resulting uptick in risk appetite weighed on the safe-haven yen, a currency that tends to rise during times of market turmoil and vice versa.

Given the simmering U.S.-China trade tensions, however, some analysts say the dollar’s gains against the yen may be limited in the near term.

China has slapped extra tariffs of up to 25 percent on 128 U.S. products including frozen pork, as well as on wine and certain fruits and nuts, in response to U.S. duties on imports of aluminium and steel, China’s finance ministry said.

The tariffs, to take effect on Monday, match a list of potential tariffs on up to $3 billion (£2.1 billion) in U.S. goods published by China on March 23.

Asian equities showed resilience on Monday, starting the new quarter with mild gains after a strong performance by global equities last week.

Analysts say another focus is the potential for foreign investment by Japanese institutional investors at the start of Japan’s new financial year.

Against a basket of six major peers, the dollar last stood at 89.971, having backed off from a one-week high of 90.178 set last Thursday.

The euro held steady at $1.2321.

Although expectations of an exit from the ECB’s stimulus had boosted the euro since last year, the common currency has been in a holding pattern since hitting a three-year high of $1.2556 on Feb. 16, with its March 1 low of $1.21545 seen as an immediate support level.

Elsewhere, some emerging Asian currencies edged higher, with the Malaysian ringgit rising to as high as 3.8550 per U.S. dollar, reaching its firmest since April 2016.

The U.S. 10-year Treasury yield last stood at 2.764 percent, after having set a seven-week low of 2.739 percent on Thursday.

Source:reuters.com