Investing.com - The safe haven yen strengthened on Monday as a fresh escalation in trade tensions between the U.S. and other major economies hit risk appetite, while commodity linked currencies slipped lower as oil prices declined.
USD/JPY hit a two-week low of 109.48 overnight and was trading at 109.44 by 03:51 AM GMT (07:51 AM GMT), off 0.47% for the day.
Market sentiment was hit after the Wall Street Journal reported that U.S. President Donald Trump has plans to bar many Chinese companies from investing in U.S. technology firms and to block additional technology exports to Beijing.
The report added to concerns over the latest flare up in global trade tensions after Trump on Friday threatened to impose a 20% tariff on car imports from the EU.
Trump’s threat came after the EU imposed tariffs on a range of U.S. imports in response to steel and aluminum tariffs from the White House.
The euro was lower against the yen, with EUR/JPY down 0.61% to 127.38.
The single currency was a touch lower against the dollar, with EUR/USD slipping 0.13% to 1.1638.
The euro had risen against the dollar on Friday, buoyed by data showing that second quarter growth is likely to have been solid and by fresh assurances from Italy’s new government that the country would not leave the euro area.
The single currency received an additional boost after Greece secured debt relief and a cash infusion from the euro zone.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.1% to 94.29. The index ended the previous week down 0.63% having retreated from an eleven-month high of 95.22 reached on Thursday.
The pound was slightly lower, with GBP/USD down 0.14% to 1.3244.
The commodity linked currencies were broadly lower as oil prices gave back some of Friday’s strong gains as trade worries weighed.
Oil prices had risen on Friday after major oil exporters agreed to a modest increase in production.
The Australian dollar was lower, with AUD/USD down 0.19% to 0.7431. The Canadian dollar was also weaker, with USD/CAD climbing 0.15% to 1.3288.