SINGAPORE (Reuters) – The dollar was hamstrung versus its rivals on Thursday, restrained by concerns over global growth, the U.S. government shutdown and a yet-unresolved U.S.-Sino trade dispute.
“Trade tensions are the most dominant factor for investor sentiment right now and will drive market flows,” said Nick Twidale, chief operating officer at Rakuten Securities.
Twidale - Investor - Risk - Appetite - Concerns
Twidale added that investor risk appetite will only improve once concerns over the partial U.S. government shutdown and trade tensions fade.
The Aussie dollar was a big mover in the Asian session, trading 0.22 percent lower at $0.7126 after National Australia Bank said it would raise mortgage rates by 12 to 16 basis points. Earlier, the Aussie was in positive terrain on the back of solid jobs data.
US - Government - Shutdown - Day - Investor
The partial U.S. government shutdown, now in its 34th day has hurt investor sentiment. U.S. Republican Senate Majority Leader Mitch McConnell said he planned to hold a vote on Thursday on a Democratic proposal that would fund the government for three weeks.
Global growth concerns have also rattled investor appetite for risk. On Monday, the International Monetary Fund (IMF) cut its 2019 and 2020 global growth forecasts, citing a bigger-than-expected slowdown in China and the eurozone, and said failure to resolve trade tensions could further destabilize a slowing global economy.
Trading - Yen - Percent - Greenback - Session
In Asian trading, the yen was marginally higher at 109.51, after weakening 0.2 percent versus the greenback in the previous session.
On Wednesday, the Bank of Japan kept its policy unchanged. The BOJ cut its inflation forecasts and warned of growing risks to the economy from trade protectionism and slowing global demand.
Dollar - Index - Gauge - Value - Versus
The dollar index , a gauge of its value versus six major peers, was steady at 96.06.
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