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Dollar Rebounds; Yen Dragged Lower by Weak GDP

6/8/2018, 3:23:53 PMBasics of Trading
Dollar Rebounds; Yen Dragged Lower by Weak GDP

The dollar rebounded in morning trade in Asia Friday, although it was still hovering near three-week lows after sliding in the past few days.

The yen was under pressure after data showed Japan’s gross domestic product for the first quarter fell 0.2% compared to the previous quarter. Market also look to the Group of Seven summit this weekend to find cues for U.S. trade relations with other peers.

The U.S. dollar index, which tracks the greenback against a basket of six major currencies, added 0.03% to 93.46 by 11:54PM ET (03:54 GMT).

Despite the short-lived rally on Friday morning, the dollar index has been sliding since last week, from a high at 94.85 last Wednesday to a three-week low at around 93.40 level this Friday. The dollar was under pressure this week against a firmer euro that bounced back from 10-month lows on the easing political concern in Italy.

Geopolitical tensions continued to warm in East Asia, as U.S. President Donald Trump said he may sign an agreement to officially end the Korean War with North Korea’s Kim Jong Un at their upcoming summit next Tuesday in Singapore. Trump even suggested hosting Kim at the White House later this year.

Meanwhile, Japan released weaker than expected GDP. The yen was losing ground to the dollar, as the USD/JPY pair added 0.01% to 109.71. The country’s GDP growth figure came in at -0.2% on quarter in the first three months of 2018, compared to the estimated -0.1%.

This week’s focus is also on the upcoming G7 summit scheduled this weekend, as trade issues between the U.S. and other countries will continue to garner attention to see if a global trade war is likely to tick start.

In China, the USD/CNY pair added 0.15% to trade at 6.4201.  The People's Bank of China set the set the reference rate for the yuan against the dollar, the mid-point from which the currency is allowed to trade, at 6.4003 versus the previous day's 6.3919.

Elsewhere, the AUD/USD pair eased 0.21% to 0.7607.