CURRENCIES: Trade Turmoil Sparks Flight To Haven Currencies, As Yen And Dollar Rally
June 19 2018 - 5:40AM
Dow Jones News
By Sara Sjolin, MarketWatch
Euro selloff picks up after Draghi comments
The yen and dollar rallied against other major currencies on
Tuesday, as fears of an escalating trade conflict between the
world's two biggest economies sent investors looking for
shelter.
Trade tensions between the U.S. and China have been on the rise
recently, but they intensified significantly on Monday when U.S.
President Donald Trump threatened to slap up to $400 billion more
in tariffs on Chinese goods
(http://www.marketwatch.com/story/trump-seeks-additional-200-billion-in-tariffs-against-china-and-threatens-even-more-2018-06-18),
on top of the $50 billion his administration has already
detailed.
China responded on Tuesday, saying Beijing will have no choice
but to take comprehensive measures in response to the U.S.'s trade
moves
(http://www.marketwatch.com/story/china-threatens-further-tariffs-on-us-products-as-trade-conflict-escalates-2018-06-19).
The yen -- a traditional haven currency -- rallied on the
heightened tensions. The dollar bought Yen109.71, compared with
Yen110.55 in late New York trade on Monday, while the fetched
Yen126.76, compared with Yen128.50 on Monday.
The dollar fared well against major currencies other than the
yen, and that helped lift the U.S. ICE Dollar Index 0.3% to
95.119.
The euro dropped to $1.1553 from $1.1624 late Monday. The shared
currency moved a leg lower Tuesday after European Central Bank
President Mario Draghi said that "significant monetary policy
accommodation is still needed" to support inflation.
Speaking at an ECB event in Sintra, Portugal, the central bank
boss said that the threat of protectionism and rising oil prices
are posing a risk to economic recovery in the eurozone.
Meanwhile, in the U.K., the pound dropped below $1.32 for the
first time since November, changing hands at $1.3185, compared with
$1.3245 on Monday.
The plunge in sterling came as U.K. Prime Minister Theresa May
faced more pressure over Brexit ahead of a House of Commons vote
Wednesday on an amendment to the divorce bill, needed for the U.K.
to legally leave the European Union. The U.K.'s upper house -- the
House of Lords -- on Monday delivered May another defeat, backing a
vote to give parliament more say on the final exit agreement.
(END) Dow Jones Newswires
June 19, 2018 05:25 ET (09:25 GMT)
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