Investing.com – The dollar pushed higher against a currency basket on Monday, boosted by the diverging monetary policy outlook between the U.S. and Europe, while the yen remained supported as trade tensions underpinned safe haven demand.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.26% to 94.69 by 03:30 AM ET (07:30 AM GMT), holding below Friday’s eleven-month high of 95.13.
The index rose 1.33% last week; its best weekly performance in seven weeks after a hawkish Federal Reserve pointed to a faster pace of monetary tightening this year while the European Central Bank gave a dovish signal.
The euro was lower against the dollar, with EUR/USD down 0.37% to 1.1567 after falling 1.34% in the previous week after the ECB outlined plans to keep interest rates on hold until at least the middle of next year.
The dollar was a touch lower against the yen, with USD/JPY edging down to 110.57, still not far from Friday’s three-week highs of 110.90.
Concerns over trade tensions revived after U.S. President Donald Trump announced tariffs on $50 billion of Chinese imports on Friday, prompting Beijing to respond in kind, adding to fears over the outlook for global growth.
The yen received an additional boost after an earthquake hit the western Japanese city of Osaka.
The safe haven yen is often sought by investors in times of geopolitical tensions and market turmoil.
Meanwhile, the commodity linked currencies were pressured by falling oil prices.
The Canadian dollar was trading near Friday’s one-year lows, with USD/CAD at 1.3186.