World Market And Commodity News
Trade war concerns underpin dollar gains
LONDON, Sept 12: The dollar consolidated gains on Wednesday as markets remained cautious about trade talks between the United States and Canada, as protracted weakness in China's currency weighed on sentiment.
With market appetite for taking risk limited - an Asian equity index is down for the 10th consecutive day and emerging market currencies are falling, led by the Indian rupee - traders sold currencies perceived to be vulnerable from any escalation in the trade conflict.
The Australian dollar led major currencies lower, falling 0.3 per cent to $0.7102 and not far from a February 2016 low of $0.7085.
The dollar rose nearly one per cent in the past two weeks, taking its gains in the past six months to more than six per cent Emerging-market currencies were on the receiving end.
"Emerging market selloff seems to be broadening out and monetary and financial conditions have tightened, not boding well for the growth outlook," Morgan Stanley strategists said.
Against a basket of its rivals, the dollar was steady at 95.20, close to a three-week high of 95.74 reached last week.
Two Canadian sources said overnight Ottawa was ready to offer the United States limited access to the Canadian dairy market as a concession in negotiations to remake the North American Free Trade Agreement.
The Canadian dollar was little changed at $1.3073 per US dollar after rallying nearly three-fourths of a per cent late in the US session. -Reuters