The dollar edges lower early Wednesday, but trades in a tight range, as investors prefer the Japanese yen, considered a haven currency, after North Korea tested another ballistic missile just as President Donald Trump and his Chinese counterpart prepared to meet on regional stability.<\/b>
The dollar edged lower early Wednesday, but traded in a tight range, as investors gravitated to the Japanese yen, considered a haven currency, after North Korea tested another ballistic missile just as President Donald Trump and his Chinese counterpart prepared to meet on regional stability.
North Korea launched a medium-range ballistic missile off the east coast of the Korean Peninsula on Wednesday morning , as Trump is set to host a two-day meeting Chinese President Xi Jinping on Thursday.
The launch of the missile, confirmed by U. S. Pacific Command in Hawaii and by South Korea\u2019s Joint Chiefs of Staff on Wednesday morning, took place from Sinpo, a city on the east coast where North Korea has a shipyard and last year claimed the launch of a submarine-launched ballistic missile.
\u201cInvestors are interested to see if both leaders are capable of creating a plan which could be mutually beneficial for both countries. We all know that Trump has called China a currency manipulator and he does not believe that the U. S. has a fair deal with China,\u201d said Naeem Aslam, chief market analyst with Think Markets.
Trump and Xi are expected to discuss trade. Trump has already described the meeting as \u201cvery difficult.\u201d
\u201cKeeping the peace in Asia is just another item on the agenda which will be important for both leaders to talk about. [North Korea tests] add another dimension to President Trump and President Xi\u2019s meeting,\u201d said Aslam. \u201cSecretary of State Rex Tillerson has already made the U. S. position clear by signaling that the U. S. will not tolerate such activities.\u201d
Though the perceived safe-haven Japanese currency tends to gain amid geopolitical tension or risk aversion, the dollar also got some help from Japanese importers on a \u201cgotobi\u201d date\u2014the fifth day of the month and dates that are multiple of five\u2014on which accounts are usually settled, traders noted.
Also in focus is the U. S. jobs, report, which will be released on Friday, and is expected to generally support Fed interest-rate hikes this year, a supportive dollar factor. Of course, the pace and Fed hikes remains up for debate.
A gauge of activity in the eurozone\u2019s manufacturing and services sectors rose less sharply in March than initially estimated, but still points to a pickup in economic growth during the first three months of the year. Data firm IHS Markit Wednesday said its composite Purchasing Managers Index for the eurozone, based on a survey of 5,000 companies, rose to 56.4 in March from 56.0 in February , reaching its highest level in almost six years.<\/p>\n