Forex- U.S. Dollar Falls as Trump Threatens to Veto Spending Bill
Investing.com - The U.S. dollar remained lower against a basket of other currencies on Friday as fears of a global trade war kept the greenback down and Trump threatened to veto the spending bill.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.30% to 89.20 as of 9:29 AM ET (13:29 GMT).
On Thursday Trump announced tariffs on $50 billion worth of Chinese imports in retaliation for China’s unfair seizure of U.S. intellectual property.
China promptly retaliated with plans to announce tariffs of its own against the U.S., rising concern among investors of a global trade war.
The Federal Reserve’s decision to hike the interest rate by 25 basis points on Wednesday and increase the pace of tightening has also weighed on the greenback.
Meanwhile Trump threatened to veto the $1.3 trillion spending bill that was passed last night because it does not provide funding for a border wall or deal with the 800,000 Deferred Action for Childhood Arrivals (DACA) recipients. A veto would shut down the government at midnight.
The dollar fell to a two year low against the safe haven yen, with USD/JPY losing 0.10% to trade at 105.17.
The euro was higher, with EUR/USD up 0.32% to 1.2341.
Meanwhile GBP/USD jumped 0.31% to 1.4139 after news that the European Union had agreed to adopt a negotiation stance on a future trade relationship with the U.K. after it leaves.
Elsewhere, the Australian dollar was higher, with AUD/USD rising 0.48% at 0.7730, while NZD/USD inched up 0.64% to 0.7253.
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