US Treasury Secretary denies any chance or a currency war
- Author: Eleanor Harrison Jul 25, 2018,
Jul 25, 2018, 2:32
All this could further exacerbate dollar strength.
It had rallied about 1.4 percent on Friday after strong retail sales and inflation data reinforced expectations for another interest rate hike by the Bank of Canada this year.
In individual market movers, shares of telecommunications equipment maker ZTE jumped 1.5% in Hong Kong rose 0.6% in Shenzhen.
The yield on U.S. 10-year Treasuries rose 7 basis points to a month-high 2.96 percent as investors weighed up the impact of a new policy framework for the Bank of Japan, which has been buying government bonds as a means to stir inflation in the world's third-biggest economy. The BoJ is scheduled to hold its next monetary policy meeting on July 30 and 31.
Fear that USA and Japanese policymakers will scale back economic stimulus sent quivers through debt markets on Monday, while US stocks gained ahead of major company earnings reports. Immediate resistance is located at 111.50, a break above targets 111.87 (Jan 11 High).
"The dollar/yen has broken below its trend line support at around 110.40".
"Although US equities edged lower on Friday and the yen strengthened, most cross-asset moves are supportive of APAC [Asia-Pacific] equities - particularly dollar weakness, strength in emerging-markets FX, and a dramatic bear steepening of global yield curves".
It was last down 0.2% at 94.27, the lowest in more than two weeks.
Mr Trump on Friday said he was ready to impose tariffs on all US$500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.
Earlier this month, the USA imposed levies on $34 billion of Chinese exports of machinery, components and electronics. The kiwi traded at 75.57 yen from 75.60 yen yesterday.
Germany's DAX fell 0.2 percent at 12,535.71 points; France's CAC 40 trades 0.5 percent lower at 5,371.24 points.
"While oil prices were the primary beneficiary of the weekend's headline battle between President Trump and Iranian President Rouhani, that boost started to fizzle as traders then veered to oversupply concerns", said Stephen Innes, head of Asia-Pacific trading at Oanda trading group. Brent eased 17c to $72.90.
USA crude was last off 3 cents at $68.24 a barrel after posting its third straight weekly loss.
Spot gold was barely changed at $1,231.8 an ounce.
"The US is invoking this trade war", Chinese foreign ministry spokesperson Geng Shuang said. USDCAD closed the session on negative notes at 1.3144.
"I don't think the Fed should be raising interest rates at a time when Congress and the president under the Tax Cuts and Jobs Act is trying to grow the economy", Grant said.
Highly liquid 10-year policy bank bonds issued by China Development Bank also saw a spike in yields, jumping 7 basis points to 4.2525 percent.