Trump comments cut the dollar's rally short
The dollar held below a one-year high on Friday.
The dollar has held below a one-year high on Friday as the latest comments from U.S. President Donald Trump spurred investors to take profits after a recent rally, while a weakening Chinese yuan capped risk appetite.
In a CNBC interview on Thursday, Trump said a strong dollar put the United States at a disadvantage and he was ready to place tariffs on $500 billion of imported goods from China .
Despite the ratcheting higher of trade tensions, the dollar was poised for a second straight week of gains. It was up more than 5 percent in the past three months on expectations the U.S. central bank will keep raising interest rates in the coming months.
"We don't think the dollar rally is at a risk of ending as the economic momentum is still quite strong, though Trump's comments have given an impetus for profit taking," said Manuel Oliveri, a currency strategist at Credit Agricole in London.
Against a basket of other currencies, the dollar was weaker at 95.10, just below the one-year high of 95.62 it reached in the previous session.
A growing divergence in monetary policy, with the U.S. central bank tightening faster than its peers, has boosted the appeal of U.S. assets. The latest flows data indicate extended inflows into U.S. stocks as the second-quarter earning season got underway.
Trump's comments on trade yanked the yuan down more than half a percent in London before the Chinese currency stabilized around 6.8162 per dollar. The latest drop has taken its cumulative losses to more than 7 percent since mid-June.
A soft patch in the dollar prompted some relatively high-yielding currencies to regain some balance. Safe-haven currencies such as the Swiss franc also remain well supported.
The euro was broadly steady at $1.1644, hovering above a three-week low of $1.1575 hit on Thursday.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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