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Forex - Dollar holds steady, focus remains on U.S.-North Korea tensions

Published 09/08/2017, 13:47
Updated 09/08/2017, 13:50
© Reuters.
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Investing.com - The dollar held steady against the other major currencies on Wednesday, after the release of mixed U.S. data and as markets continued to focus on geopolitical tensions between the U.S. and North Korea.

In a preliminary report, the U.S. Bureau of Labor Statistics said nonfarm productivity rose 0.9% in the second quarter, exceeding expectations for an uptick of 0.7%.

The report also showed that unit labor costs edged up 0.6% in the three months to June, compared to expectations for a 1.2% gain.

USD/JPY was down 0.55% at a two-month low of 109.72 after U.S. President Donald Trump said North Korea would be "met with fire and fury" if it continued its threats.

Pyongyang replied it was "carefully examining" a plan to strike Guam, where a U.S. military base is located.

Meanwhile, USD/CHF tumbled 1.16% to 0.9630 and EUR/CHF lost 1.27% to trade at 1.1303.

The Swissie’s move against the euro marked the largest one day change since the Swiss National Bank shocked markets when it scrapped its currency peg with the single currency in January 2015.

The dollar remained moderately higher against the euro, with EUR/USD down 0.12% at 1.1739, while GBP/USD held steady at 1.2991.

The Australian dollar was weaker, with AUD/USD down 0.38% at 0.7882, while NZD/USD was almost unchanged at 0.7328.

Reserve Bank of Australia Assistant Governor Christopher Kent said on Wednesday that the Aussie's recent appreciation mainly reflects the decline of the U.S. dollar in response to an unwinding of the so-called "Trump Trade".

Last week, RBA Governor Philip Lowe warned that the rising Australian dollar had become a threat to growth, inflation and employment.

A few days later, the central bank cut Australia’s growth forecasts to 2.5% from 3.0% for 2017.

Meanwhile, USD/CAD gained 0.30% to trade at 1.2703, not far from Monday’s three-week high of 1.2714, after Statistics Canada said building permits increased by 2.5% in June, beating expectations for a 2.0% drop.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 93.44, close to Friday’s one-week high of 93.64.

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