The US dollar on Friday skidded against the safe-haven Japanese yen after the US launched cruise missiles at an airbase in Syria, raising concerns of a sharp escalation in the Syrian civil war.
US President Donald Trump on Thursday said he ordered missile strikes against a Syrian airfield from which a deadly chemical weapons attack was launched.
On Friday, the US dollar index, which gauges the greenback against a basket of six major rivals, was down slightly on the day at 100.66, but up 0.3 percent for the week.
Against the yen, which tends to gain in times of geopolitical tension or risk aversion, the US dollar erased its early modest gains and dropped 0.3 percent to ¥110.44, down 0.8 percent for the week.
“The fact that the [US] dollar hasn’t broken under ¥110 on this news shows how strong that level is, but we are still waiting to see Russia’s reaction to the US move,” Sumitomo Mitsui Trust senior market economist Ayako Sera said.
In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.041 to close at NT$30.601. The NT dollar fell 0.9 percent against the US dollar from last week’s US$30.336.
The pound fell to US$1.2371, a fresh low for the day and week, and lowest since March 21.
Euro slid to US$1.0581, lowest since March 10.
Against the yen, the euro on Friday slumped 0.4 percent to ¥117.53 after dropping as low as ¥117.30 earlier, its deepest pit since late November last year.
The US military gave Russian forces advanced notice of its strikes and did not hit sections of the base where the Russians were believed to be present, a Pentagon spokesman said on Thursday.
“The news of the attack on Syria, and the resulting risk-averse mood, has overtaken the US jobs report as the main focus of the day,” Sera said.
Falling US Treasury yields also undermined the US dollar.
The benchmark 10-year yield touched its lowest levels since November last year, and stood at 2.31 percent in Asian trading, down from its US close of 2.343 percent.
Trump’s domestic policy agenda was put in the spotlight on Thursday, when US House of Representatives Speaker Paul Ryan said tax reform would take longer to accomplish than healthcare reform.
Ryan said that the US Congress and the White House were initially closer to agreement on healthcare legislation than on tax policy.
Currency policy was also in focus, after an administration official told reporters that “misalignment” was seen as more significant than “currency manipulation” as a cause of trade deficits.
“Currency misalignment is different from currency manipulation and currency undervaluation,” the official said. “So we want to see a process of analyzing currency situations that includes whether it’s misaligned, not just whether it’s devalued or manipulated.”
Additional reporting by Bloomberg and CNA
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