iq-option.trading – The dollar rose to near 10-week highs against a currency basket on Tuesday as heightened trade tensions exacerbated fears of a slowdown in global economic growth, bolstering safe haven demand.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.13% to 96.47 by 04:49 AM ET (08:49 AM GMT), within striking distance of the 10-week high of 96.62 set on Friday.
Demand for the dollar continued to be underpinned after Bloomberg reported that the Trump administration is preparing to announce tariffs on all Chinese imports by early December if talks next month fail to ease the trade conflict between Washington and Beijing.
U.S. President Donald Trump and Chinese President Xi Jinping are due to meet in Argentina during the G20 Summit late next month.
The escalation in trade tensions comes against a background concerns over a weakening earnings outlook for technology companies and the pace of U.S. interest rate increases.
The yen, typically seen as a safe haven during time of market turmoil, was lower against the dollar, with USD/JPY advancing 0.4% to 112.82 ahead of the Bank of Japan’s monetary policy announcement on Wednesday.
The euro was little changed against the dollar, with EUR/USD at 1.1366, not far from Friday’s 10-week lows of 1.1335.
The single currency has been pressured lower by rising political risk in the euro area.
German Chancellor Angela Merkel announced Monday that she will step down as party leader and, in time, as Germany’s chancellor, following poor regional election results over the weekend.
An ongoing row between Brussels and Italy over Rome’s proposed budget has also weighed on the euro.
Investors were awaiting an update on the heath of the euro area economy later Tuesday, with the bloc due to report preliminary estimates on third quarter growth.
The pound was a touch lower, with GBP/USD dipping 0.11% to 1.2778.