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Yen gains as political woes for Trump hit dollar

8/18/2017, 10:40:19 AMMarket Analysis
Yen gains as political woes for Trump hit dollar

The yen gained further in Asia on Friday with the dollar on the back-foot over a widening drop in faith that President Donald Trump can carry through an aggressive economic set of policies.

USD/JPY changed hands at 109.42, down 0.15%, while AUD/USD traded at 0.7895, up 0.11% after china housing figures.

In China, data on house prices for July showed a 9.7% rise, compared with a 10.2% gain posted in June.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.09% to 93.56.

Overnight, the dollar traded higher against a basket of global currencies on Thursday, as the White House quashed rumours that National Economic Council Chairman Gary Cohn was set to resign while upbeat jobs and manufacturing data lifted sentiment.

The dollar resumed its climb after paring earlier gains, as a White House official said Cohn “is focused on his responsibilities as NEC Director and any reports to the contrary are 100% false,” following a tweet sent from an unverified news account suggesting that Cohn was set to resign.

Also adding to positive sentiment on the greenback were a pair of upbeat economic reports on initial jobless claims and manufacturing activity, suggesting the U.S. economy is on track for solid third-quarter growth.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 232,000 for the week ended Aug. 12, the Labor Department said. That beat economists’ forecasts of a just 4,000 decline.

On the manufacturing front, the Federal Reserve bank of Philadelphia said that its Philly Fed manufacturing index rose to a seasonally adjusted 18.9 for August, compared with consensus estimates of 18.5.

The rebound in the dollar came after it slumped to session lows on Wednesday, as sentiment on a third rate hike later this year soured, after the minutes from the Federal Reserve’s July policy meeting indicated Fed members were divided on the outlook for inflation and monetary policy tightening