TOKYO, June 11 ― The dollar was largely steady against other major currencies today, but investor appetite for risk was kept in check after US President Donald Trump renewed his tariff threats towards China.
Financial markets over the last year have been gripped by fears of escalating trade tensions between the world's two largest economies, stoking worries over the outlook for global growth.
Against a basket of six peers, the dollar edged up 0.02 per cent to 96.781, having ended the previous session with a 0.2 per cent gain.
Appetite for risk remained subdued as investors waited for confirmation of a possible meeting between Trump and China's president at the Group of 20 summit near the end of the month, analysts said.
Trump said yesterday he was ready to impose another round of tariffs on Chinese imports if he does not reach a trade deal with President Xi Jinping at the June 28-29 summit in Osaka.
Since two days of talks to settle the US-China trade dispute last month in Washington ended in a stalemate, the US president has repeatedly said he expected to meet Xi at the G20 gathering. China has not confirmed any such meeting.
“It might not happen if the Chinese side thinks there isn't any point in having a meeting if the opinions are far apart from the start,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
“Trump has been applying pressure by emphasising there'll surely be a meeting, but it isn't clear what the Chinese side will do.”
In offshore trade, the Chinese yuan was last up 0.2 per cent at 6.9310 yuan per dollar, reversing an earlier loss. It was still hovering not far off a near seven-month low brushed on Friday.
The currency was not helped by data on Monday showing an 8.5 per cent -drop in imports in May, a much worse than expected outcome that signalled weak domestic consumption.
The Australian dollar touched a one-week low at US$0.6953 (RM2.8944) before recovering from its losses, in line with the move in the offshore yuan.
It was last up 0.2 per cent at US$0.6965, recouping some of the previous session's declines, when it shed more than half a percent.
The Aussie is often seen as a proxy for China's growth, with Australia export-reliant economy shipping huge volumes of commodities to the Asian nation.
Elsewhere, the dollar was steady at ¥108.415, while the euro was largely unchanged at US$1.1317.
The single currency dipped yesterday after two sources familiar with the European Central Bank's policy discussions said on the weekend that a rate cut was firmly in play if the bloc's economy stagnates again after expanding by 0.4 per cent in the first quarter.
The euro rallied nearly 1.5 per cent last week after the ECB said rates would stay “at their present levels” until mid-2020 instead of hinting at rate cuts, as some had expected. ― Reuters