U.S. Dollar Skids as Trade War Fears Heat Up By Investing.com

Investing.com – The U.S. dollar was on the backfoot Monday, pressured by a rise in safe-haven currencies on fears an escalating trade war between the United States and its trading partners could dampened global growth.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.22% to 93.98.

Reports suggesting the U.S. was drawing up plans to block firms with at least 25% Chinese ownership from buying U.S. companies with industry changing technology, sent markets into risk-off mode, prompting a bid in safe haven currencies like the yen and Swiss franc, stifling the greenback.

fell 0.40% to Y109.53, while fell 0.01% to 0.9878.

The yen and the Swissy are often sought in times of geopolitical tension or market turbulence because both countries have large current account surpluses.

Positive U.S. economic data, showing topped expectations, drew a limited turnaround in risk sentiment.

, meanwhile, rose 0.33% to $1.1692 shrugging off out of Germany that undershot economists’ forecasts.

rose 0.38% to C$1.3319 as investor expectations for a Bank of Canada (BoC) rate hike fell amid fears that U.S. auto tariffs could push Canada into recession.

Market-based odds of a rate increase at BoC’s announcement on July 11 are now below 50%, down from around 80% a couple of weeks ago, Gluskin Sheff & Associates chief economist David Rosenberg said in a note to clients.

“If President Trump follows through on a threat to add a 25% tariff on auto imports, Rosenberg says, that “will easily drain a percentage point off of Canadian growth at a time when it is running little better than pace as it is– making a recession a possible threat,” Rosenberg added.

rose 0.02% to $1.326.