Dollar Steadies Amid Asia Tension

The dollar steadied in Asian hours on Tuesday, with downside limited by ongoing political tension in Asia.

The ICE dollar index DXY traded at 79.039, from 79.045 in late trading on Monday.

“The U.S. dollar has traded with a firmer bias, although much like equity markets, the moves have been quite modest,” said currency strategists at Westpac.

“Continued tensions between China and Japan over disputed islands are adding another layer of uncertainty to the outlook,” the strategists said.

Against the yen USDJPY, the dollar traded at ¥78.73, from ¥78.74.

Michael Hewson, analyst at CMC Markets, noted “rising tensions between China and Japan have sent the yen lower.”

The euro EURUSD fell to $1.3077, from $1.3094 the previous session.

The British pound GBPUSD  traded at $1.6232, from $1.6238 in late trading on Monday.

The Australian dollar AUDUSD reached $1.0430, down from $1.0459 recorded late the previous day. The Reserve Bank of Australia on Tuesday released the minutes from its latest interest rate meeting and Michael Turner, strategist at RBC Capital Markets, described the minutes as “dovish.”

He said they “signalled heightened concern over China, the high exchange rate and lower commodity prices. A cut in October is possible but the stars will need to align.”

Marketwatch