Dollar steadies vs yen as U.S. yields come off lows, but capped by trade woes

Wednesday,   20-Jun-2018   09:05 AM (IST)

The dollar steadied against the yen on Wednesday, as U.S. yields pulled back from lows hit on concerns about a worsening trade feud between Washington and Beijing, although persistent worries about the trade rift are likely to cap any greenback recovery.The dollar was little changed at 110.08 yen following its retreat to an eight-day trough of 109.55 on Tuesday after U.S. President Donald Trump threatened to slap more tariffs on China, prompting an angry response from Beijing. Escalating tensions triggered risk aversion and caused a sell-off in global equities.The yen is often sought in times of political tension and market turmoil.The dollar managed to bounce back against the yen as a degree of calm returned to broader markets and Wall Street shares pared a bulk of their losses, while safe-haven U.S. Treasury yields climbed from three-week lows.Better-than-expected U.S. housing data also nudged Treasury yields off their lows on Tuesday.The dollar index against a basket of six major currencies stood at 95.026 (DXY) after advancing to an 11-month peak of 95.296 on Tuesday amid the risk aversion.The Australian dollar, considered sensitive to shifts in sentiment toward China, fell to a 13-month low of $0.7347 on Tuesday before pulling back slightly to $0.7386.The Swiss franc was little changed at 0.9948 franc per dollar after gaining about 0.1 percent overnight.The 10-year U.S. Treasury note yielded 2.896 percent after dropping to as low as 2.853 percent on Tuesday.