The dollar was hamstrung versus its rivals on Thursday, restrained by concerns over global growth, the U.S. government shutdown and a yet-unresolved U.S.-Sino trade dispute.
“Trade tensions are the most dominant factor for investor sentiment right now and will drive market flows,” said Nick Twidale, chief operating officer at Rakuten Securities.
The Aussie dollarwas a big mover in the Asian session, trading 0.22 percent lower at $0.7126 after National Australia Bank said it would raise mortgage rates by 12 to 16 basis points.
In Asian trading, the yen was marginally higher at 109.51, after weakening 0.2 percent versus the greenback in the previous session.
The dollar index (DXY), a gauge of its value versus six major peers, was steady at 96.06.
All eyes will be on the euro (EUR=) as investors await the European Central Bank’s monetary policy announcement later on Thursday where it is all but certain to keep policy unchanged.
Since Prime Minister Theresa May’s divorce deal with the EU was rejected by lawmakers last week in the biggest defeat in modern British history, lawmakers have been trying to plot a course out of the crisis, yet no option has the majority support of parliament.
Some analysts expect limited upside for sterling. Philip Wee, currency strategist at DBS says that most of the gains in the pound are due to the unwinding of short positions. He sees sterling capped in the range of $1.3170-1.3240.
