U.S. Dollar Index up as trade war subsides

U.S. Dollar Index today edged up high at 93.8788, posting a recent high at current level since it fell to 88.25 during the mid of February.

A CNBC report highlighted the main cause for this as due to “the trade war on hold yesterday after successful negotiations between US and China”. After the peace was publicly announced, Dollar strengthened against Yen and stood at 111.085. The reaction to the statement shows market sentiment on the ease of trade between world’s two biggest economies.

According to another report by a global oil analyst, “The dollar rose 0.2 percent to 110.99 yen in early Asian trade, nearing a four-month high of 111.085, which had been set on Friday.”

According to the report, “The easing of U.S.-China trade tensions is likely to underpin riskier assets such as equities and bodes well for the dollar against the safe-haven yen,” said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

Dollar is likely to strengthen as 10-year US yields climbed a seven year high of 3.128 percent on Friday and dollar gained a solid foothold against yen.

Not everyone favors the strengthening of dollar, however, according to Brandywine Global Investment Management “the dollar might drop by 5 percent by the end of year; the major reason being Trump Administration’s unwillingness to weaken the dollar.”