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US Dollar Climbs as Trade Fears Reduce

US Dollar climbs as trade fears reduce
The US dollar strengthened against its key counterparts in early European deals on Tuesday as worries about a trade war waned after US President Donald Trump appeared to soften his position on tariff measures, amid mounting pressure from political allies.

US House of Representatives Speaker Paul Ryan urged Trump to rethink the planned tariffs on steel and aluminum as confusion persisted about the timing and extent of the planned tariffs.

Ryan said that he was “extremely worried about the consequences of a global trade war and urged the White House to not advance with this plan,” according to a statement issued by his office.

Trump took to Twitter on Monday to highlight trade deficits with Mexico and Canada.

Trump indicated that the tariffs would be removed if the US negotiates a “new & fair” NAFTA agreement.

Stocks staged a rally following Trump’s statement, as investors doubt that fears were overstated.

The currency traded mixed against its major rivals in the Asian session.

While it rose against the yen and the pound, it held steady against the franc and the euro.

The greenback climbed to a 4-day high of 0.9419 against the franc, from a low of 0.9386 hit at 8:30 pm ET. On the upside, 0.97 is seen as the next resistance level for the greenback.

Figures from the Federal Statistics Office showed that Switzerland’s consumer price inflation weakened to a six-month low in February.

Inflation eased to 0.6% in February as expected from 0.7% in January. This was the lowest since last August, when prices climbed 0.5%.

The greenback reversed from an early low of 1.2363 against the euro, rising to 1.2328. The greenback is poised to find resistance around the 1.22 level.

Data from HIS Markit showed that Germany’s construction sector grew at the weakest pace in 13 months in February. The headline construction Purchasing Managers’ index fell to 52.7 in February from an 82-month high of 59.8 in January.

The greenback edged up to 1.3817 against the pound, off its early low of 1.3863. The greenback is likely to test resistance around the 1.35 region.

The greenback bounced off to 1.2995 against the loonie and 0.7757 against the aussie, off its early low of 1.2962 and a multi-day low of 0.7792, respectively. If the greenback rises further, it may find resistance around 1.31 against the loonie and 0.76 against the aussie.

On the flip side, the greenback pulled back to 105.96 against the yen, reversing from an early 5-day high of 106.46. The greenback is seen finding support around the 103.00 region.

The greenback dropped to a 4-day low of 0.7248 against kiwi, compared to 0.7226 hit late New York Monday. Next likely support for the greenback is seen around the 0.74 level.

At 7:30 am ET, New York Fred President William Dudley speaks about the economic impact of the 2017 hurricanes at the US Virgin Islands Nonprofit Leaders Breakfast Roundtable in St. Thomas.

Us factory orders and durable goods orders for January, as well as Canada Ivey PMI for February are set for release in the New York session.

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