Investing.com - The dollar was stead as trade tensions between the U.S. and China were put on hold.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.12% to 93.69 as of 11:30 AM ET (15:30 GMT).
The trade war between the U.S. and China is “on hold” as the two work on a trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday. The two countries had been engaged in a tit-for-tat over tariff disagreements over the last few months. However, China has yet to agree to cut the trade deficit despite President Donald Trump’s demand that the world’s second largest economy reduce its trade surplus by $200 billion.
The greenback was also supported by bond yields rising to a seven-year high last week. The yield on the benchmark United States 10-Year Treasury note rose to 3.069 after hitting an overnight high of 3.082.
The increase in bond yields, along with positive economic data and rising inflation, has boosted expectations that the Federal Reserve will increase interest rates and tighten monetary policy.
The Fed raised rates in March and is expected to raise rates twice more, with some investors expecting a third hike.
Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
The dollar rose against the safe haven yen, with USD/JPY increasing 0.32% to 111.13.
The euro was down amid political uncertainty in Italy and an equity sell-off, with EUR/USD falling 0.14% to 1.1755.
Sterling was also lower amid uncertainty over Brexit talks. GBP/USD was down 0.39% to 1.3418.
Meanwhile, the Canadian dollar was higher, with USD/CAD slipping 0.30% to 1.2844.
Elsewhere, the Australian dollar was higher, with AUD/USD up 0.165% to 0.7559 while NZD/USD increased 0.09% to 0.6920.