The dollar climbs supported by the high returns of US Treasury bonds

The dollar was a little fresh, today, thanks to the high returns of US Treasury bonds, despite the trading of currencies on narrow ranges, as investors have faced difficulty in determining the impact of the global trade war on inflation and growth in the United States.

On Wednesday, US President Donald Trump threatened to impose additional customs duties on the European Union commodities, while major commercial partners for the United States pledged to respond to the procedures imposed by the president already.

The escalation of global trade tensions and fears of the possibility of the American economy in a recession phase of shaking global markets and igniting severe fluctuations in the foreign exchange market amid the fluctuation of traders between satisfaction and anxiety over the sudden changes in Trump’s policy.

The dollar rose 0.05 percent against the yen to 148.31, compensating some of its losses earlier in the week when it decreased to its lowest level in five months against the Japanese currency, as fears of an economic slowdown in the United States raised a demand for the yen as a safe haven.

American inflation

The data issued, on Wednesday, showed that the American inflation increased with less than expected in February, but the improvement it caused may be temporary, as the data did not fully reflect the series of customs duties imposed by Trump.

“What raises more uncertainty is future inflation expectations and US economic activity, and this is largely due to the inability to predict American commercial policy,” said James Riley, chief economist in Capital Economics.

He continued: “These issues move the markets, and the report has not provided any new visions of either of them.”

However, the returns of US Treasury bonds increased with the recklessness of traders at the future high inflation, as the US Treasury’s bonds have settled for 10 years near its highest level in a week at 4.3047 percent.

There was no change in the return of treasury bonds for two years at 3,9866 percent.

This maintained the dollar’s support, and the euro was paid away from its highest level in the five months that it recorded on Tuesday, as the price of the unified European currency reached $ 1.0890.

The British pound rose 0.06 percent to $ 1.2968.

The dollar index climbed from its lowest level in the five months that it recorded on Tuesday, to record 103.57.

“Customs are inflationary pressures on the global economy, which will constitute a nightmare for central banks … but central bank governors are cautious and maintain their openness to what is coming,” said Carol Kong, a currency expert at the Australian Bank of Commonwealth.

“Although central banks are able to reduce interest rates to compensate for the negative impact on growth, inflation fears may eventually restrict what can be done in terms of monetary policy,” she added.