(March 02, 2018) The U.S. dollar pushed lower against other major currencies on Friday, as worries over a potential global trade war following news of fresh U.S. tariffs continued to weigh on heavily sentiment.
U.S. President Donald Trump announced plans on Thursday to impose tariffs of 25% on imported steel and 10% on aluminum, in a move to “protect U.S. industry”.
The news sparked concerns over potential trade wars, which would have a negative impact on the U.S. economy.
The announcement overshadowed positive remarks by Fed Chair Powell, who told the Senate Banking Committee on Thursday that there was no evidence the U.S. economy is overheating.
Two days earlier, the Fed president had reiterated that the U.S. central bank would likely move forward with gradual increases in interest rates.
Separately, New York Federal Reserve President William Dudley said on Thursday that four interest-rate hikes this year would constitute a “gradual” tightening.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.30% at 89.95 by 08:15 a.m. ET (12:15 GMT), off Thursday’s six-week peak of 90.89.
The euro and the pound were higher, with EUR/USD up 0.38% at 1.2310 and with GBP/USD adding 0.08% to 1.3784.
Earlier Friday, data showed that activity in the UK construction sector rose last monthbut still remained subdued.
In the euro zone, a report showed that German retail sales fell 0.7% in January, confounding expectations for an increase of 0.9%.
Elsewhere, the yen and the Swiss franc remained higher, with USD/JPY down 0.77% at 105.40 and with USD/CHF sliding 0.72% to trade at 0.9351.
The Australian and New Zealand dollars were lower, with AUD/USD easing 0.09% to 0.7747 and with NZD/USD shedding 0.22% to 0.7235.
Meanwhile, USD/CAD gained 0.37% to trade at 1.2883.