By Saqib Iqbal Ahmed
NEW YORK (Reuters) - The U.S. dollar rose against the yen on Thursday, as an absence of any fresh escalation in trade-related tensions between the United States and its major trading partners capped demand for the Japanese currency.
The yen tends to benefit during geopolitical or financial stress as Japan is the world’s biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize.
The dollar was up 0.26 percent against the yen, at 110.54 yen.
The greenback assumed a stronger tone after U.S. President Donald Trump said on Wednesday he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.
"Right now we are seeing that there has been a bit of a quiet period in the middle of the week, and that's been good for the dollar versus the yen," said Alfonso Esparza, senior currency analyst at OANDA in Toronto.
"There is more risk appetite and less need for the security that the yen provides," he said.
The dollar index <.DXY>, which measures the greenback against a basket of six currencies, was up 0.08 percent at 95.34, after advancing about 1 percent over the last two sessions.
The dollar index, which slipped earlier after data showed that U.S. economic growth in the first quarter slowed more than earlier estimated, was back near the almost one-year high of 95.531 hit overnight.
U.S. gross domestic product grew at a 2.0 percent annual rate in the January-March period, revised from the 2.2 percent pace the Commerce Department reported last month, amid the weakest consumer spending in nearly five years.
Despite the worries around trade, the dollar's longer-term trend was still bullish, Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California, said.
"The conversation as we end out June is really to the fact that the Fed raised rates this month and the expectation is that they want to do two more hikes for the second half of the year," he said.
European Union leaders meet in Brussels for two days of talks on migration that German Chancellor Angela Merkel described as "make or break" for the EU.
The pound fell to its lowest level since early November as investors fretted that the EU summit would underline the lack of meaningful progress for months in negotiations on a Brexit deal. Sterling was down 0.3 percent.
Trade-related worries sent the Chinese yuan
The dollar slipped 2.24 percent against the Mexican peso
The Canadian dollar
(Reporting by Saqib Iqbal Ahmed; Editing by Bernadette Baum and Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Jun 29, 2018 03:05 AM