Dollar rises after sliding on Trump's currency remarks

REUTERS
NEW YORK
Published 13.04.2017 21:40

The U.S. dollar rose on Thursday, rebounding after a slide that investors considered overdone following remarks by President Donald Trump that the currency was getting too strong and he would prefer the Federal Reserve to keep interest rates low. The greenback and U.S. Treasury yields took a heavy hit after Trump's comments to the Wall Street Journal, in which he said the strength of the dollar would hurt the economy.

But after losing 0.6 percent on Wednesday - its biggest one-day fall in more than three weeks - the dollar recovered on Thursday against a basket of major currencies that tracks its value, rising 0.3 percent. Having hit a five-month low of 108.73 yen in early Asian trading, the dollar steadied at 109.20 yen.

Trump's remarks went against a long-standing practice of both U.S. Democratic and Republican administrations of refraining from commenting on policy set by the independent Federal Reserve. It is also unusual for a president to talk about the value of the dollar, a subject usually left to the U.S. Treasury secretary.

The dollar has shed 1.7 percent against the yen so far this week, its fourth week lower against the safe-haven Japanese currency in five, as a rise in tensions in Asia and Europe prompted yen buying. Investors are concerned about the upcoming French presidential election as well as possible U.S. military action against Syria and North Korea, and an escalation of tensions with Russia.

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