Business
The dollar rose on Thursday, rebounding from a slide investors considered overdone following remarks by U. S. President Donald Trump that the currency was getting too strong and he would prefer the Federal Reserve to keep interest rates low.
Updated : Mar 24, 2018, 06:07 AM IST
The dollar rose on Thursday, rebounding from a slide investors considered overdone following remarks by U.S. President Donald Trump that the currency was getting too strong and he would prefer the Federal Reserve to keep interest rates low.
The greenback and U.S. Treasury yields took a heavy hit after Trump's comments to the Wall Street Journal, in which he said the strength of the dollar would hurt the economy.
The dollar rose 0.45 percent against a basket of major currencies, on track for its largest one-day gain in two weeks. It fell 0.6 percent on Wednesday, the biggest one-day fall in more than three weeks.
"Clearly, I think it was oversold yesterday," said Peter Ng, senior currency trader at Silicon Valley Bank in Santa Clara, California. "The market was very sensitive to headlines given how nervous it has become due to geopolitical risk."
Trading was also thinner than usual because of the Passover and Good Friday holiday observances in the United States and Europe this week, Ng said.
Having hit a five-month low of 108.73 yen in early Asian trading, the dollar steadied at 109.10 yen.
"Yes, it was negative what (Trump) said ... but it's not a big surprise – it wasn't a U-turn in his rhetoric on the exchange rate so far," said Commerzbank currency strategist Thu Lan Nguyen in Frankfurt.
"The question is, is he able to influence monetary policy in order to get a weaker dollar? That is still an open question."
Trump's remarks went against a long-standing practice of both U.S. Democratic and Republican administrations refraining from commenting on policy set by the independent Federal Reserve. It was also unusual for a president to talk about the value of the dollar, a subject usually left to the U.S. Secretary of the Treasury.
The dollar shed 1.75 percent against the yen this week, its fourth week lower in five, as a rise in tensions in Asia and Europe prompted buying of the safe-haven Japanese currency.
Investors are concerned about the upcoming French presidential election as well as possible U.S. military action against Syria and North Korea, and an escalation of tensions with Russia.
The euro fell 0.5 percent to $1.0619 after touching a one-week high in overnight trading. It gained 0.23 percent against the dollar for the week.
The dollar was little changed against China's offshore yuan , after falling to a six-day low on Wednesday. It had risen to a one-month high at the start of the week.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)