The Japanese yen lost strength vs. the U.S. dollar on Tuesday’s opening session as the possibility of a trade war decreased in light of China and the United States’ willingness to start negotiating on trade. This development has strengthened the demand for risky assets at the expense of safe-haven assets. The U.S. dollar advanced more than 0.2 percent closing at 105.59 yen. The dollar rebounded from its weakest level in 16 months of 104.56 yen recorded yesterday.
Looking at other currencies, the euro was also climbing vs. the yen by about 0.1 percent. The likelihood of Jens Weidmann becoming the next European Central Bank (ECB) president has boosted the euro.
Markets across the globe were badly influenced by last week’s news that U.S. President Donald Trump would impose tariffs on goods coming from China. This has made investors worried about a possible trade war between the two superpowers. However, a report today suggested a more lenient approach as the current Premier in China, Li Keqiang, said that both sides needed to negotiate and formulate understanding regarding trade issues.
The price gold was marginally down on Tuesday, following reports that the U.S.-China trade tensions have receded. U.S. gold futures for April delivery dropped by 0.2 percent closing at $1,352.20 an ounce. Spot gold inched down by 0.1 percent towards $1,352.40 an ounce.