U.S. Dollar Weakens On Trade War Concerns

00:01, 2nd March 2018

(RTTNews) - The U.S. dollar slipped against its major counterparts in the Asian session on Friday, after the European Commission promised "countermeasures' against U.S. President Trump's announcement of new tariffs on imported steel and aluminum.

European Commission President Jean-Claude Juncker condemned that Trump's decision is "blatant intervention" to protect US industry.

He said he would "bring forward in the next few days a proposal for WTO-compatible countermeasures against the U.S."

Juncker said Trump's announcement to levy a 25 percent tariff on steel imports and a 10 percent tariff on aluminum would have a negative impact on global markets.

Meanwhile, during his second day of congressional testimony, Fed Chair Jerome Powell said that there hasn't yet been strong evidence of a decisive increase in wages.

Asian stock markets dropped as Trump's decision sparked fears of aggressive trade protectionism.

The greenback dropped to a 2-day low of 1.3793 against the pound and held steady thereafter. On the downside, 1.42 is seen as the next support level for the greenback.

The greenback reversed from an early high of 106.29 against the yen, dropping to a 2-week low of 105.71. The next possible support for the greenback is seen around the 104.00 mark.

Data from the Ministry of Internal Affairs and Communications showed that the unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in January.

That was well beneath forecasts for 2.8 percent, which would have been unchanged from the December reading.

The greenback that closed Thursday's trading at 0.9416 against the franc weakened to a 2-day low of 0.9387. The greenback is poised to challenge support around the 0.91 level.

The greenback hit a 3-day low of 1.2288 against the euro and moved sideways thereafter. The pair closed Thursday's trading at 1.2267.

The greenback fell to a 2-day low of 0.7774 against the aussie and a 3-day low of 0.7277 against the kiwi and moved sideways thereafter. If the greenback drops further, 0.79 and 0.75 are possibly seen as its next support levels against the aussie and the kiwi, respectively.

On the flip side, the greenback edged up to 1.2841 against the loonie and traded sideways shortly thereafter.

Looking ahead, U.K. construction PMI for February and Eurozone PPI for January are set for release in the European session.

In the New York session, Canada GDP data for December and University of Michigan's final consumer sentiment index for February are scheduled for release.