Yen Keeps Dollar in Doldrums Amid Global Growth Jitters
The U.S dollar slipped against its rivals on Tuesday, pressured by a rise in the yen amid rising safe-haven demand. That was fueled by escalating U.S.-EU trade tensions and the International Monetary Fund's bearish update on global growth.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.11% to 95.93.
USD/JPY fell 0.33% to Y111.10 as safe-haven demand was stoked on fears the U.S. and EU could be set to impose tit-for-tat tariffs on each others' products.
The dispute over government subsidies given to Boeing and European rival Airbus had been tied up in ligation since 2004, but the World Trade Organization in May last year ruled that European subsidies to Airbus were illegal.
The U.S. said it could be slapping tariffs on $11 billion worth of EU goods. In response, the EU said it stands ready to launch countermeasures.
Safe-haven demand was fueled further by global growth concerns after the IMF cut its 2019 U.S. growth outlook to 2.3% from 2.5% in January and cut its 2019 global growth outlook to the lowest level since the financial crisis.
On the domestic economic front, weaker-than-expected U.S. job openings also pinned the dollar back.
GBP/USD fell 0.20% to 1.3035 as U.K. lawmakers voted in favor of Theresa May's plans to delay Brexit until June 30. The prime minister will now travel to to the European Council summit in Brussels on Wednesday, where she will formally request an extension to Brexit.
Ahead of May's trip, a draft EU document circulated to diplomats proposing an extension, but it left blank the length of a delay to Brexit, which will be agreed by leaders at the EU summit on Wednesday.
European Council President Donald Tusk urged the EU leaders to consider offering the U.K a lengthy Brexit delay as there was "little reason to believe" that the U.K. leaders would be able to rubber stamp the withdrawal agreement by the end June.
EUR/USD rose 0.06% to $1.1266 ahead of the European Central Bank decision due Wednesday, with analysts expecting the central bank's monetary policy to be balanced after the dovish outlook provided in the previous in meeting in March.
USD/CAD climbed 0.11% to C$1.3327 with the loonie coming under pressure amid falling U.S. oil prices as Russian President Vladimir Putin poured cold water on expectations for an extension to oil-production cuts, saying the current price of oil suited Moscow.