August 8, 2018 / 2:04 PM / in 4 months

REFILE-FOREX-Retaliatory tariffs by China boost dollar, weaken yuan

 (Corrects typographical error in 9th paragraph)
    By Karen Brettell
    NEW YORK, Aug 8 (Reuters) - Retaliatory trade tariffs by
China helped give the U.S. dollar a mild boost on Wednesday
while sterling slid to an 11-month low on concerns about
Britain's exit from the European Union.
    China is laying additional import tariffs of 25 percent on
$16 billion worth of U.S. goods ranging from oil and steel
products to autos and medical equipment, the commerce ministry
said.
    That came in response to the United States’ decision to
impose 25 percent tariffs on another $16 billion of Chinese
goods starting on Aug. 23.
    “With the news of the retaliatory tariffs from China there
is a move towards dollar buying playing out at the moment,” said
Bipan Rai, North American head, FX strategy at CIBC Capital
Markets in Toronto.
    Trade tensions have been viewed as positive for the
greenback as the U.S. economy is seen as better placed to handle
the disputes than emerging markets.
    The dollar index rose as high as 95.417, near a more
than one-year high of 95.652 hit on July 19, before dropping
back to 95.234, up 0.02 percent on the day. The index has
struggled to break much above the 95.5 level, which it has
tested multiple times in the past two months.
    The yuan weakened by 0.23 percent on the day to
6.8345 per dollar.
    The pound dropped to its lowest levels against the
dollar and euro in almost a year as markets ramped up bets on
Britain leaving the EU without an agreement with Brussels.

    “Markets are slowly starting to price in a higher and higher
chance of a 'no deal' type scenario with Brexit,” said Sireen
Harajli, foreign exchange strategist at Mizuho in New York.
    The Canadian dollar dropped to a two-week low against
the greenback as the country’s row with Saudi Arabia escalated.
The Financial Times on Wednesday reported that the Saudi Central
Bank and pension funds have instructed their overseas asset
managers to dispose of Canadian assets.
    “Some selling by a significant owner of Canadian assets will
leave a mark on the Canadian dollar,” said CIBC’s Rai.
     The yen gained after reports that Bank of Japan
board members had disagreed on how far interest rates should be
allowed to move from the central bank's target.
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    Currency bid prices at 9:40AM (1340 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1592        $1.1597     -0.04%         -3.37%      +1.1628     +1.1574
 Dollar/Yen       JPY=        111.0300       111.3700    -0.31%         -1.46%      +111.4300   +110.8400
 Euro/Yen         EURJPY=     128.73         129.17      -0.34%         -4.77%      +129.4500   +128.5700
 Dollar/Swiss     CHF=        0.9958         0.9953      +0.05%         +2.21%      +0.9970     +0.9939
 Sterling/Dollar  GBP=        1.2869         1.2937      -0.53%         -4.76%      +1.2961     +1.2854
 Dollar/Canadian  CAD=        1.3061         1.3050      +0.08%         +3.85%      +1.3119     +1.3049
 Australian/Doll  AUD=        0.7404         0.7420      -0.22%         -5.09%      +0.7434     +0.7383
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1544         1.1546      -0.02%         -1.24%      +1.1557     +1.1539
 Euro/Sterling    EURGBP=     0.9006         0.8965      +0.46%         +1.38%      +0.9016     +0.8959
 NZ Dollar/Dolar  NZD=        0.6737         0.6733      +0.06%         -4.93%      +0.6761     +0.6724
 Dollar/Norway    NOK=        8.2221         8.2002      +0.27%         +0.18%      +8.2360     +8.1813
 Euro/Norway      EURNOK=     9.5343         9.5112      +0.24%         -3.19%      +9.5362     +9.5109
 Dollar/Sweden    SEK=        8.9570         8.9118      +0.39%         +9.21%      +8.9729     +8.8944
 Euro/Sweden      EURSEK=     10.3824        10.3418     +0.39%         +5.52%      +10.3935    +10.3369
 
 (Additional reporting by Tommy Wilkes in London; Editing by
Meredith Mazzilli)
  
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