Early trade in New York: Dollar edges up as trade tensions support

The dollar edged higher on Wednesday as worsening US-China relations supported demand for the safe-haven greenback even as investors awaited the release of minutes from the Federal Reserve's October policy meeting for clues to the path of future US interest rates.

Investors, who in recent weeks had grown optimistic that Washington and Beijing would sign a so-called "phase one" deal this month to scale back their 16-month-long trade war, were worried by a hardening of the trade war rhetoric from both sides.

The dollar index, which compares the dollar against six major currencies, was up 0.06% at 97.914. The index rose as high as 98.038 earlier in the session.

"It is the same theme that is coming back today, which is essentially the trade tensions between the US and China," said Minh Trang, senior FX trader at Silicon Valley Bank.

China's yuan slipped to a new two-week low against the dollar on Wednesday morning.

Trade-exposed currencies weakened, with the Australian dollar down 0.19% versus the US dollar.

Investors were also looking forward to the release of the minutes from the US Federal reserve's FOMC meeting in October are due at 2 p.m. EST (1900 GMT). Analysts expect little impact as the Fed made it clear in October that they were not going to cut interest rates any more this year.

Elsewhere, sterling fell 0.05%, a second straight day of declines, dented by Labour leader Jeremy Corbyn's better-than-expected showing in a pre-election TV debate versus Prime Minister Boris Johnson who is perceived by markets as more business-friendly.