The dollar rose on Thursday for the first time in five days, as risk appetite eased and stocks gave up gains notched early in the week, amid nagging concerns about US threats to impose additional tariffs on Chinese imports next month. Heavy losses in emerging market currencies have also benefited the dollar.
"The market tone is generally risk-off and supportive of haven assets," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. "Markets are cautiously hopeful that a deal may be near for a new NAFTA (North American Free Trade Agreement). Yet a trade deal between the US and China ... remains elusive," he added.
President Donald Trump has threatened 25 percent tariffs on a $200 billion list of Chinese imports because of China's retaliatory tariffs on $50 billion worth of US products in the two countries' escalating trade war. The US tariffs are expected to take effect in late September after a public comment period ends on Sept. 5.
In late morning trading, the dollar index rose 0.2 percent to 94.827. The Canadian dollar, however, pulled back from a 2-1/2-month peak hit two days ago versus the dollar, dropping 0.5 percent to 77 US cents. The dollar was also supported by data showing US consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.4 percent last month. Other emerging currencies were also weaker against the dollar, The Mexican peso fell 0.8 percent, while the South African rand dropped 1.3 percent.
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