Dollar, Yen Little Changed; U.S.-EU Trade Tensions, Brexit in Focus
The U.S. dollar and the Japanese yen were little changed on Wednesday in Asia as traders remained cautious amid the Brexit uncertainty and trade tensions between the EU and the U.S.
The Japanese yen received some support earlier in the day, fuelled by escalating U.S.-EU trade tensions and the International Monetary Fund's bearish update on global growth.
The safe-haven currency gave back some of its gain and was last traded at 111.14 against the dollar, down 0.03%.
Reports on Monday said the U.S. and EU could be set to impose tit-for-tat tariffs on each others' products. 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.
The dispute over government subsidies given to Boeing (NYSE:BA) 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.
Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was also largely unchanged at 96.637.
Investor sentiment was further dampened today 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 3.3%, the lowest level since the financial crisis.
Looking ahead, investors' focus will be on a European Central Bank meeting and the release of minutes of the Federal Reserve's last policy meeting.
On Tuesday, U.K. lawmakers voted ahead of a Brexit summit meeting later in the day to approve Prime Minister Theresa May's plan to seek to delay Britain's exit from the European Union to June 30.
The EUR/USD pair was unchanged at 1.1260, while the GBP/USD pair edged up 0.1% to 1.3069.
The AUD/USD pair and the NZD/USD pair were up 0.2% and 0.1% respectively.