Forex – Dollar Hovering Near 6-Month Highs as Trade Concerns Linger

Investing.com – The dollar was holding steady not far from six-month highs against a basket of the other major currencies on Monday as trade concerns remained in focus following the release of soft Chinese growth data.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was little changed at 94.45 by 03:37 AM ET (07:37 AM GMT).

Progress in trade talks between the European Union and China helped ease investor concerns over growing international trade tensions.

Premier Li Keqiang on Monday stressed the need to uphold free trade and multilateralism following talks with the EU aimed at achieving more balanced trade between the two economies.

But the comments came as data showed that China’s economy slowed in line with expectations in the second quarter, indicating that the trade dispute with the U.S. may be acting as a drag on growth.

Chinese GDP rose at an annual rate of 6.7% in the three months to June, down from 6.8% in the first quarter.

Over the weekend, U.S. President Donald Trump alarmed European leaders by declaring that the EU is a “foe” given how it trades with the U.S.

The dollar was a touch higher against the safe haven yen, with USD/JPY edging up 0.11% to 112.49.

Investors were looking ahead to June retail sales data from the U.S. later in the day.

The International Monetary Fund was also to release its latest World Economic Outlook later in the day.

The euro was little changed, with EUR/USD at 1.1689, holding above the almost two-week low of 1.1612 reached on Friday.

Sterling was steady, with GBP/USD last at 1.3234 as investors continued to watch ongoing Brexit developments ahead of more crunch votes in the UK parliament this week, with Prime Minister Theresa May facing a rebellion from Brexit hardliners.