NEW YORK (Reuters) - The dollar rose for the first time in five days on Thursday, as risk appetite eased and stocks gave up gains notched early in the week amid nagging concerns about U.S. threats to impose additional tariffs on Chinese imports next month.
Heavy losses in emerging market currencies have also benefited the dollar.
Bloomberg reported on Thursday that U.S. President Donald Trump told aides he wants to move ahead on a plan to impose tariffs on $200 billion worth of Chinese goods next week.
Reuters is unable to verify the veracity of the report.
The Bloomberg report triggered falls in the offshore Chinese yuan and the Australian dollar, which both fell to a nearly one-week low against the U.S. dollar.
The U.S. dollar also dropped to the day’s low versus the safe-haven yen after the Bloomberg report. The dollar was last down 0.6 percent at 111.05 yen.
Trump has threatened 25 percent tariffs on $200 billion of Chinese imports because of China’s retaliatory tariffs on $50 billion worth of U.S. products. The U.S. tariffs are expected to take effect in late September after a public comment period ends on Sept. 5.
“The dollar is clearly benefiting from all these trade tension headlines, but at the end of the day, the market is only focused on the U.S. economy’s solid fundamentals,” said Juan Perez, currency trader at Tempus Consulting in Washington.
“The consistency of the U.S. dollar has been supporting the U.S. dollar all along.”
In afternoon trading, the dollar index rose 0.2 percent to 94.738.
The United States and Canada, meanwhile, have expressed optimism that they could reach a new NAFTA deal by Friday, although Ottawa said a number of tricky issues remained.
The Canadian dollar, however, pulled back from a 2-1/2-month peak hit two days ago versus the dollar, dropping 0.6 percent to 76.96 U.S. cents.
The dollar was also supported by Thursday’s data showing U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4 percent last month.
With demand strong last month, consumer prices continued their gradual upward trend. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components rose 0.2 percent.
Sharp drops in emerging market currencies have also helped the dollar’s cause, with declines in the Argentine peso leading the way. Argentina’s central bank on Thursday boosted its benchmark interest rate to 60 percent from 45 percent in a bid to control inflation running at more than 31 percent, as the country’s currency plummeted 15.6 percent to a record low 39 pesos per U.S. dollar.
Other emerging currencies were also weaker against the dollar: the Mexican peso fell 0.7 percent, while the South African rand dropped 1.3 percent.
Currency bid prices at 3:13PM (1913 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1660 $1.1706 -0.39% -2.80% +1.1718 +1.1642
Dollar/Yen JPY= 111.0400 111.6500 -0.55% -1.46% +111.7500 +111.0000
Euro/Yen EURJPY= 129.50 130.74 -0.95% -4.20% +130.8600 +129.4300
Dollar/Swiss CHF= 0.9694 0.9705 -0.11% -0.50% +0.9715 +0.9687
Sterling/Dollar GBP= 1.3005 1.3024 -0.15% -3.75% +1.3043 +1.2986
Dollar/Canadian CAD= 1.2992 1.2902 +0.70% +3.30% +1.2999 +1.2903
Australian/Doll AUD= 0.7257 0.7308 -0.70% -6.97% +0.7314 +0.7250
Euro/Swiss EURCHF= 1.1304 1.1360 -0.49% -3.29% +1.1368 +1.1304
Euro/Sterling EURGBP= 0.8964 0.8986 -0.24% +0.91% +0.8993 +0.8954
NZ NZD= 0.6639 0.6715 -1.13% -6.31% +0.6716 +0.6635
Dollar/Norway NOK= 8.3475 8.3290 +0.22% +1.71% +8.3616 +8.3076
Euro/Norway EURNOK= 9.7364 9.7545 -0.19% -1.14% +9.7760 +9.7155
Dollar/Sweden SEK= 9.1301 9.1362 -0.47% +11.32% +9.1562 +9.0965
Euro/Sweden EURSEK= 10.6479 10.6978 -0.47% +8.22% +10.7060 +10.6260
Reporting by Gertrude Chavez-Dreyfuss; Editing by Steve Orlofsky