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Dollar Firmer Despite U.S.-North Korea Tensions

2018-5-25 16:35:45Basics of Trading
Dollar Firmer Despite U.S.-North Korea Tensions

The dollar rose against the other major currencies in Asia in late morning trade Friday, with the U.S. dollar index testing the 94 level. The market appeared to take in stride news that U.S. President Donald Trump decided to cancel a planned summit with North Korean leader Kim Jong Un.

The greenback was not hit by Trump's decision to call off the June 12 summit, a move that may reignate geopolitical tensions in the region.

U.S. dollar index, which tracks the dollar against a basket of six major currencies, stood at 93.83, up 0.11%, at 11:42PM ET (03:42 GMT). This week the greenback climbed to its highest level for the year when the index hit 94.10 on Wednesday night.

The White House released a letter by Trump to Kim, in which the U.S. president regarding the cancelled summit. Trump cited “tremendous anger and open hostility” in recent statements from Pyongyang and called the outcome a setback for both North Korea and the world.

The USD/JPY pair added 0.27% to 109.54. The yen, which tends to rise in times of market turbulence, was not pushed higher by news of the cancelled summit, however. Tokyo Core CPI also came in slightly worse than expected, posting 0.5% versus the estimated 0.6%.

In Australia, the AUD/USD pair lost 0.11% at 0.7566. The geopolitical concerns sent the sentiment-linked Aussie a little lower.

In China, the People's Bank of China set the reference rate for the yuan against the dollar, the mid-point from which the currency is allowed to trade, at 6.3867 versus the previous day's 6.3816. The USD/CNY pair gained 0.10% to trade at 6.3857