Forex – Dollar index edges up to 1-week highs in cautious trade: INV

Investing.com – The dollar edged slightly higher against the other major currencies on Wednesday, as investors remained cautious following news of a fresh North Korean missile test.

USD/JPY rose 0.24% to 113.55, the highest since May 16.

The yen erased the previous session’s gains posted after North Korea said it had fired an “unidentified ballistic missile” which landed in the Sea of Japan. Tokyo strongly protested what it called a clear violation of UN resolutions.

The test came just days before leaders from the Group of 20 nations are due to discuss steps to curtail North Korea’s weapons programs.

The euro edged lower, with EUR/USD slipping 0.15% to 1.1332 after European Central Bank Executive Board member Benoit Coeure said the governing council has not discussed policy changes.

The single currency was boosted last week, rising to 14-month highs against the dollar after hawkish comments by ECB President Mario Draghi fuelled expectations that it is moving closer to scaling back its stimulus program.

The greenback remained supported after upbeat U.S. manufacturing data on Monday reinforced expectations for another rate hike by the Federal Reserve this year.

The dollar had come under pressure last week amid expectations that central banks in Europe and Canada are getting ready to join the Fed in tightening monetary policy.

Elsewhere, GBP/USD was little changed at a one-week trough of 1.2914, while USD/CHFadded 0.10% to trade at 0.9664.

Earlier Wednesday, research group Markit said its U.K. services purchasing managers’ indexdecreased to 53.4 last month from a reading of 53.8 in May. Analysts had expected the index to drop to only 53.5.

The Australian dollar was steady, with AUD/USD at 0.7609, while NZD/USD slipped 0.22% to 0.7271.

Meanwhile, USD/CAD added 0.15% to trade at 1.2958, just off the previous session’s 10-month low of 1.2913.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.13% at a one-week high of 96.12.

Source: Investing.com

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