ADVERTISEMENTThe single currency also received a setback after German Chancellor Angela Merkel was dealt a fresh blow when her interior minister offered to quit in an escalating row over migration policy. On Monday, the single currency fell 0.5 percent at $1.1633 in early London trading. Chinese stock markets fell 2.5 percent while its currency sank to more than seven-month lows as investor concerns grew about a widening trade conflict. ADVERTISEMENTThe dollar extended its gains against the yen to hit a fresh six-week high of 111.06 yen. The Japanese currency was unmoved by the Bank of Japan's tankan business sentiment survey, which showed a slight dip in big Japanese manufacturers' sentiment.
FOREX-Dollar dips, euro steadies after German coalition partners resolve row
The euro was little changed at $1.1630 after shedding 0.45 percent overnight. ADVERTISEMENTThe dollar remained broadly supported, meanwhile, as trade tensions propped up the greenback against commodity currencies, like the Australian dollar, and emerging market currencies whose economies are most vulnerable to a downturn in trade. "There's a strong element of 'risk off' generated by trade concerns behind the dollar's latest rise. That said, the dollar has managed to gain only as emerging market and commodity currencies have slid due to risk aversion," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo. In a widely expected move the RBA left its cash rate at 1.5 percent on Tuesday following its policy meeting.
FOREX-Strong German industry data pushes euro to near 3-week high
As it stated in In early London trading, the single currency rallied to a high of $1.1711, just shy of a three-week peak of $1.1722. But with a deadline for Washington to impose tariffs on Chinese imports also due, markets remained rangebound. ADVERTISEMENT"Chinese authorities have been clear they don't want to use the weaker yuan as a major foreign exchange trade policy... If they were to target a weaker yuan, it could potentially lead to problems, such as capital outflows (as) experienced back in 2015," said Shinichiro Kadota, senior FX & rates strategist at Barclays in Tokyo. The dollar's index against six rivals was 0.34 percent lower at 94.34, its lowest level in a week.FOREX-Trade hopes, German data support euro near 3-week highs
ADVERTISEMENTGerman industrial orders had a stronger-than-expected jump in May after four consecutive monthly drops, as demand from domestic customers and the rest of the euro zone picked up. Meanwhile, German carmakers are set to post their biggest daily gain since late March with Daimler, BMW , Volkswagen and Renault leading the broader index higher. The Fed will release minutes of its June meeting, with investors looking for clues on whether it is still on track to raise interest rates twice more this year. ADVERTISEMENTBeyond the outlook on interest rates, markets will be closely analysing the recent strength in European activity data. "The euro is getting a bit of a lift on the German data though the trade concerns will continue to dominate markets with the Fed minutes being the key data point," said Kenneth Broux, a currency strategist at Societe Generale in London.
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