Yen tacks on trade war concerns

On Wednesday, the safe haven yen managed to strengthen and the evergreen buck dived to two week minimums versus a group of basic currencies because the resignation of Donald Trump’s top notch economic advisor drove worries as for a rising trade conflict.

The currency pair USD/JPY slumped 0.41% hitting 105.68, which is not far from an overnight minimum of 105.46.

Financial markets were affected by a storm of selling following news, according to which Gary Cohn resigned from his post of the National Economic Council director having failed to convince Donald Trump not to impose his duties on aluminum and steel imports into America.

Cohn's resignation drove worries that the Trump administration is going to provide enough room to run a protectionist agenda and also increased the chances of a full-blown trade feud.

Market participants are afraid that the newly-imposed duties could potentially power inflation and cause retaliation from American trade partners. Key holders of American Treasuries, including the European Union and China, could cut their holdings of American assets in response.

Taking the gauge of the US dollar’s strength versus a group of six main rivals, the US dollar index hit 89.52 having hit a two-week minimum of 89.38 overnight.

The common currency was hovering over three-week maximums, with EUR/USD showing 1.2413.

The British pound was a bit lower, the currency pair GBP/USD went down 0.08% being worth 1.3874.

As for the Canadian dollar, it headed south, with USD/CAD gaining 0.36% being worth 1.2922 as market participants shifted their attention to a Bank of Canada interest rate verdict later in the day.

The Bank of Canada told that uncertainty regarding the future of the North American Free Trade Agreement is putting much pressure on the outlook for the Canadian economy.

Canada’s major financial institution is highly anticipated not to alter its benchmark interest rate, leaving it at 1.25%.