TOKYO, June 27 — The dollar edged up to a one-week high against the safe-haven yen today, as some of the jitters ahead of the G20 summit in Japan eased amid hopes for progress there in resolving the Sino-US trade war.

Hong Kong’s South China Morning Post, citing sources, said that the United States and China have agreed to a tentative truce in their trade dispute ahead of a meeting between leaders of the two nations on Saturday on the sidelines of the G20 summit.

The greenback added about 0.3per cent to ¥108.13, its highest since June 20.

Yesterday, the US currency already rose significantly versus the yen, a perceived safe-haven which draws bids in times of political strife, on comments from US Treasury Secretary Steven Mnuchin about a trade deal between the United States and China is “about 90per cent” complete.

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Later, analysts realised Mnuchin’s comment on degree of progress in talks was in the past tense, though the cautious optimism remained intact.

Investors are focusing on whether US President Donald Trump and Chinese President Xi Jinping, at their Osaka meeting, can pave the way to resolve a trade dispute between the world’s two biggest economies.

“While the market easily swings back and forth on US-China headlines, the real focus going into the G20 is on low Chinese economic growth and its impact on the markets,” said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities.

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“If the US-China relationship show an improvement at the G20, China likely will no longer be in a hurry to implement steps to simulate its economy.”

The Group of 20 summit was also expected to impact the policy stance of the Federal Reserve, which opened the door to possible monetary easing in coming months after last week’s meeting.

The potential implications of the Trump-Xi meeting for US monetary policy are huge, said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.

“If the two sides agree not to impose more tariffs, the Fed would no longer need to cut rates,” he said. “On the contrary, if the talks point to the imposition of more tariffs, that could nudge hesitant policymakers towards rate cuts.”

At the start of this week, the dollar took a hit — it reached a six-month low of ¥106.780 on Tuesday — on the Fed’s dovish turn.

Today, the dollar index against a basket of six major currencies rose 0.15per cent to 96.374.

The index had retreated to a three-month low of 95.843 at the start of the week amid the Fed’s easing prospects. But it has managed to regain some traction after comments this week from central bank officials such as Chair Jerome Powell that tapered expectations for aggressive rate cuts.

The euro dipped 0.2per cent to US$1.1351 (RM4.17).

The Canadian dollar was on a steady footing as crude oil’s surge supported commodity-linked currencies.

The loonie traded at CUS$1.3131 per dollar after advancing overnight to CUS$1.3108, its strongest since early February.

Oil prices surged as US stockpiles of crude and refined products decreased.

The New Zealand dollar was near a two-month peak of US$0.6693 scaled yesterday, when the currency bounced after the Reserve Bank of New Zealand refrained from lowering rates.

The Australian dollar inched up to a 2-1/2-week high of US$0.6999. — Reuters