NEW YORK: The US dollar was lower against the safe-haven Swiss franc and Japanese yen on Tuesday following renewed signs of strain in US-China trade relations, while the euro gained after the French government announced the proposed suspension of a landmark pension reform.
The dollar weakened 0.14 percent to 0.803 against the Swiss franc and was down 0.13 percent to 152.08 against the Japanese yen. The greenback gained against both currencies in the prior session.
“The market got caught a little bit yesterday,” said Marc Chandler, chief market strategist at Bannockburn Capital Markets. “People wanted to believe that the US-China trade tensions had de-escalated. But it’s clear that they have not.”
The US and China on Tuesday began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil.
In addition, Beijing announced that it has taken countermeasures against five US-linked subsidiaries of South Korean shipbuilding firm Hanwha Ocean and separately said it has launched an investigation into how a US Section 301 probe affects its domestic shipping industry.
The tit-for-tat measures undermined what appeared to be a conciliatory tone from US President Donald Trump at the weekend that had helped fuel some optimism at the start of this week.
French Prime Minister Sebastien Lecornu suspended a landmark 2023 pension reform until after the 2027 presidential election, bowing to pressure from leftist lawmakers who had demanded such a move to ensure his political survival.
The euro extended gains against the dollar following the announcement. It was up 0.16 percent at USD1.1587.
“It looks like there’s going to be less fiscal austerity than the previous government. French bonds are having a good day - they are the best performing in the euro zone,” Chandler added.
Britain’s pound was off 0.30 percent on the dollar at USD1.32955 after data showed British pay growth slowing and jobless claims ticking higher.
The pound was also softer against the euro, with the common currency up 0.37 percent at 87.18 pence.
The Australian dollar, often used as a liquid proxy for Chinese assets and broader risk sentiment given the two countries’ close economic links, shed 0.52 percent to 0.64820, its lowest in nearly two months. The New Zealand dollar fell 0.26 percent to USD0.571.
Elsewhere, cryptocurrencies were lower, with bitcoin dropping 3.44 percent to USD111,822.21. Ethereum declined 7.06 percent to USD3,986.91.
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