G7 Summit Fracas Sends Yen up; Trump to Meet Kim on Tuesday

Jun 11, 2018

Investing.com- The dollar slid while safe-haven yen edged higher in Monday morning trade in Asia after U.S. President Donald Trump left the G7 Summit early and later tweeted that the U.S. was backing out of the joint communique. Investors are looking ahead to the Trump-Kim meeting later this week and policy reviews by the world’s three major central banks.

The U.S. dollar index, which tracks the greenback against a basket of six major currencies, lost 0.06% to 93.49 by12:00PM ET (04:00 GMT).

The Group of Seven (G7) summit held in Quebec, Canada ended with Trump’s early exit and a broken consensus with the other leaders. He later tweeted that he was backing out of the joint communique and lashed out against Canadian Prime Minister Justin Trudeau.

Trump has now arrived in Singapore, where his historical meeting with North Korean’s leader Kim Jong Un is scheduled on Tuesday.

The USD/JPY pair gained 0.18% to 109.75 by 12:00PM ET (04:00 GMT). However, the market reaction was considered moderate since few traders had expected a meaningful agreement on trade to be reached at the G7.

Additionally, central banks in the U.S., the euro zone and Japan will hold their policy reviews later this week. With the U.S. Federal Reserve is expected to raise interest rates at the meeting this week, investors are focusing on whether there will be a third and fourth hike in 2018.

Meanwhile, early trade in Australia was slow due to holiday with the AUD/USD pair ticking up by 0.07% to 0.7605.

In China, the USD/CNY pair dropped 0.01% to trade at 6.4058. The People’s Bank of China set the set the reference rate for the yuan against the dollar, the mid-point from which the currency is allowed to trade, at 6.4064 versus the previous day’s 6.4003.