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Dollar Steady in Risk-Off Trade; Pound on the Defensive

Investing.com - The dollar was little changed against a currency basket on Wednesday as resurgent fears over the U.S.-China trade war sapped demand for riskier assets, while the pound remained on the back foot as a parliamentary debate on the government’s Brexit plan continued.

Wall Street slumped on Tuesday after a series of tweets by U.S. President Donald Trump dented investor confidence that a full resolution to the U.S.-China trade conflict will be reached during a 90-day trade truce.

Trump threatened to impose higher tariffs on China soon unless they make concessions, exacerbating fears over the outlook for global growth.

Worries about U.S. bond markets signaling an impending recession also weighed on market sentiment.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 96.93 by 04:10 AM GMT (09:10 AM GMT).

Trading volumes were expected to remain low, with U.S markets closed for a national day of mourning for President George H. W. Bush.

The dollar was slightly higher against the yen, with USD/JPY rising 0.2% to 112.99.

The euro was almost changed against the dollar, with EUR/USD changing hands at 1.1338.

The pound was a touch higher against the U.S. currency, with GBP/USD up 0.13% to 1.2732.

Sterling fell to its lowest level since June 2017 on Tuesday after a series of defeats in Parliament for Prime Minister Theresa May over her Brexit plan.

The pound liked likely to remain under pressure ahead of the key parliamentary vote on the Brexit deal on December 11, amid doubts over whether the vote will pass.

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