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Dollar Down on Report Cohn Contemplating Future Following Tariffs

3/7/2018, 10:34:08 AMMarket Analysis
Dollar Down on Report Cohn Contemplating Future Following Tariffs

The dollar fell against a major basket of currencies amid ongoing concerns over the prospect of a trade war, while speculation that economic adviser Gary Cohn could step down if Trump decides to proceed with tariffs weighed on sentiment.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.40% to 89.60.

Economic advisor Gary Cohn was said to be actively contemplating his future amid Trump’s recently announcement tariffs, CNBC reported, citing a source familiar with Cohn.

That echoed a report from Bloomberg News suggesting that President Donald Trump believes Gary Cohn will resign from the White House if the administration proceeds to impose import tariffs of 25% on steel and 10% tariff on aluminium.

President Trump has come under pressure since announcing plans to impose tariffs as the EU and Canada have signalled that they would retaliate with tariffs on iconic US brands.

House Speaker Paul Ryan, meanwhile, said Tuesday that Trump should “take a more surgical approach” on his plan to impose tariffs.

Offsetting risk-off sentiment somewhat were receding investor concerns over geopolitical tensions on the Korean peninsula amid reports that North Korea is open to denuclearisation should the safety of its regime be guaranteed.

USD/JPY fell 0.01% to Y106.20. The yen fell as Bank of Japan governor Haruhiko Kuroda stressed that although the central bank was considering exiting easing monetary policy measures in 2019, it does not mean it will actually exit monetary stimulus next year.

GBP/USD rose 0.29% to $1.3889, while EUR/USD rose 0.48% to $1.2395.

USD/CAD fell 0.62% to C$1.2889 after Canda’s manufacturing PMI topped economists’ forecast easing concerns about the sluggish pace of economic growth