April 2, 2018 / 2:24 PM / 4 months ago

FOREX-Dollar falls as China-U.S. trade dispute escalates

    * Dollar steadies vs yen after last week's rally
    * Focus on global trade tensions , U.S. data this week

 (Recasts, adds comment, FX table, changes byline, dateline;
previous SINGAPORE)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, April 2 (Reuters) - The dollar fell for a second
straight session on Monday in generally thin trading as China
imposed extra tariffs on U.S. products, escalating a dispute
between the world's biggest economies.
    Volume was light as some European markets are closed for the
Easter Monday holiday.
    "Broader market sentiment was dampened by ongoing trade
tensions between the U.S. and China," said Joe Manimbo, senior
market analyst, at Western Union Business Solutions in
Washington.
    China has slapped extra tariffs of up to 25 percent on 128
U.S. products including frozen pork, as well as on wine and
certain fruits and nuts, in response to U.S. duties on imports
of aluminum and steel, China's finance ministry said.

    The tariffs, to take effect on Monday, match a list of
potential tariffs on up to $3 billion in U.S. goods published by
China on March 23.
    The dollar was down 0.2 percent at 89.934 against a
basket of six major currencies, backing off from a one-week high
of 90.178 set last Thursday.
    But the dollar was up 0.1 percent against the yen at 106.24
, after rising more than 1.5 percent last week for its
biggest weekly gain since September 2017.
    The U.S. currency rose against the yen last week, helped by
signs China and the United States were working behind the scenes
to avoid a full-blown trade war, as well as hopes for a
diplomatic breakthrough over North Korea's nuclear programme.
    The dollar's gains versus the yen were viewed as short-lived
given the tension between the world's two largest economies.
    The Trump administration is expected to release a list of
other products to be targeted with tariffs by Friday. 
    The U.S. move will likely trigger a second round of
countervailing penalties from China, which could include
strategically-vital product categories such as soybeans and
aircraft, Karl Schamotta, director of global product & market
strategy at Cambridge FX in Toronto, said. 
    Beyond the potential trade war, the markets are also focused
on U.S. data this week, led by the non-farm payrolls report for
March. The reports should determine the path for future interest
rate increases, analysts said.
    The euro, meanwhile, was little changed at $1.2319. 
    Although expectations of an exit from the European Central
Bank's stimulus had boosted the euro since last year, the common
currency has been in a holding pattern since hitting a
three-year high of $1.2556 on Feb. 16, with its March 1 low of
$1.21545 seen as an immediate support level.
    
    ========================================================
    Currency bid prices at 9:57AM (1357 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2320        $1.2321     -0.01%         +2.70%      +1.2344     +1.2311
 Dollar/Yen       JPY=        106.3500       106.2600    +0.08%         -5.61%      +106.4400   +106.2000
 Euro/Yen         EURJPY=     131.04         130.97      +0.05%         -3.06%      +131.2900   +130.8200
 Dollar/Swiss     CHF=        0.9535         0.9534      +0.01%         -2.13%      +0.9550     +0.9528
 Sterling/Dollar  GBP=        1.4043         1.4015      +0.20%         +3.92%      +1.4077     +1.4020
 Dollar/Canadian  CAD=        1.2883         1.2891      -0.06%         +2.42%      +1.2900     +1.2862
 Australian/Doll  AUD=        0.7666         0.7678      -0.16%         -1.73%      +0.7697     +0.7667
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1749         1.1747      +0.02%         +0.51%      +1.1763     +1.1749
 Euro/Sterling    EURGBP=     0.8771         0.8788      -0.19%         -1.25%      +0.8783     +0.8764
 NZ Dollar/Dolar  NZD=        0.7223         0.7234      -0.15%         +1.93%      +0.7240     +0.7223
 Dollar/Norway    NOK=        7.8561         7.8478      +0.11%         -4.28%      +7.8640     +7.8301
 Euro/Norway      EURNOK=     9.6784         9.6630      +0.16%         -1.73%      +9.6854     +9.6613
 Dollar/Sweden    SEK=        8.3574         8.3408      +0.19%         +1.90%      +8.3592     +8.3299
 Euro/Sweden      EURSEK=     10.2986        10.2794     +0.19%         +4.67%      +10.3003    +10.2716
 
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Masayuki Kitano in Singapore
Editing by Susan Thomas)
  
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