© Reuters. The dollar has made a strong start to the week
Investing.com – The dollar rose against its rivals Tuesday, as solid U.S. economic data supported demand for the greenback at a time of mounting investor fears that a trade storm could be brewing.
The , which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.33% to 95.38.
U.S. manufacturing business conditions surged in August to a 14-year high, according to a survey of industry executives.
for August rose to a reading of 61.3, beating expectations of 57.6. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy.
While the solid data continued to point to underlying U.S. economic strength, some said manufacturing will be “sorely tested,” if the administration follows through on its threat to expand tariffs on Chinese imports.
The Trump administration could impose a 25% tariff on $200 billion worth of Chinese imported goods later this week. Reports surfaced last week, claiming Trump was considering moving ahead with the tariffs on China after the comment period expires on Thursday.
Public hearings were held during the last two weeks in August and American corporates were allowed to submit written comments on the Trump’s proposal to smack China with harsher trade penalties.
Meanwhile, the United States’ well-documented trade dispute with Canada is set to grip investor attention Wednesday, when both nations attempt to reach an agreement on revamping the North American Free Trade Agreement (NAFTA).
Ahead of the talks, rose 0.69% to C$1.3185.
Also helping the dollar was a weaker euro and pound as Brexit-related worries and weaker data weighed on the latter.
fell 0.38% to $1.1576, while fell 0.13%.
The rising dollar provoked investor concerns about the ability of emerging markets to finance their dollar denominated debt as the South African rand slumped against the dollar.
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