U.S. Treasury Secretary Steven Mnuchin announced over the weekend that the U.S.-Sino trade war is “on hold” after the countries agreed to stop their tariff threats and to find a mutually agreeable solution.
“We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework, Mnuchin told Fox News Sunday. No specific details about the agreement or the future plans between the countries were released, and Trump detractors are concerned that the president’s short-term financial interests will supersede more important long-term goals.
The dollar gained against the yen on Monday as traders enjoyed renewed confidence after Mnuchin’s comments. The greenback was trading up 0.49 percent to 111.28 as of 1:34 p.m. HK/SIN on Monday, surpassing a four-month high of 111.085 hit on Friday. The yen often acts as a safe-haven currency because Japan is the world’s largest creditor nation. It tends to rise in times of crisis and to fall during times of stability, so it’s hardly surprising that the currency is declining as the U.S. stabilizes its relationship with China.
The dollar index hit a five-month high on Monday, heading as high as 93.860 .DXY before declining slightly. It was trading at 93.84 .DXY at the time of this writing. The dollar’s rally was aided by the continuing struggles in Italy where the far-right League and the 5-Star Movement are working on a deal that would increase welfare spending. The euro has fallen consistently this month as the dollar has strengthened. The common currency was down 0.25 percent to $1.1746 on Monday afternoon in Asia.