The dollar was steady against its peers on Thursday, having failed to extend overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter US-China trade row kept financial markets on edge. Demand stoked by the looming end of 2018's first half was seen supporting the dollar, which was not dented by lower US yields and a slide in Wall Street shares.
The dollar index against a basket of six major currencies stood steady at 95.266 after rallying 0.65 percent the previous day. The greenback had advanced after US 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.
There was, however, some confusion about Washington's intentions - with US shares making an about-turn and dropping - after White House economic adviser Larry Kudlow told Fox Business Network later on Wednesday that Trump's announced plan did not indicate a softened stance on China.
Treasury Secretary Steven Mnuchin had favoured a more measured and global approach to protecting US technology, using authority approved by Congress, while White House trade adviser Peter Navarro, the administration's harshest China critic, had argued for China-specific restrictions.
"The dollar has managed to stay buoyant despite a drop in Treasury yields and risk-off in US stocks due to half year-end flows, which involves US investors buying back the dollar," said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.
The dollar was flat at 110.23 yen. The currency rose to 110.49 the previous day before pulling back slightly following Kudlow's comments on Trump's investment restriction plans.
The euro was a shade higher at $1.1567 after shedding 0.8 percent overnight. Concerns over political complications in Germany are expected to be a drag on the single currency.
The Australian dollar managed a modest bounce after sliding the previous day on lingering US-China trade tensions. The Aussie was up 0.2 percent at $0.7356 after plumbing a 1-1/2-year trough of $0.7323 on Wednesday.
China's yuan continued its slide, touching a new six-month low of 6.626 per dollar amid Sino-US trade tensions.
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