TOKYO- The US dollar slumped to an eight-week trough to the yen and lingered near a one-month low versus sterling on Thursday, as investor nerves about an inflation-stoking global trade war abated.
Japan’s currency was also supported by rising expectations for further Bank of Japan interest-rate hikes with a central bank official advocating continued rate hikes, a day after strong wage data.
Sterling was firm even with the Bank of England widely expected to cut rates by a quarter point later in the day.
The dollar sank 0.5 percent to 151.81 yen, the lowest since December 12, adding to a 1.1 percent slide on Wednesday.
Sterling was steady at $1.2509 after rising as high as $1.2550 in the previous session for the first time since January 7.
The euro was flat at $1.0401 after edging up 0.2 percent on Wednesday.
The dollar index – which measures the US currency against the euro, sterling, yen and three other major peers – stood at 107.57, not far from its overnight low of 107.29.
The index had jumped to a three-week high of 109.88 at the start of the week as Trump looked poised to impose 25 percent import tariffs on Mexico and Canada, but the countries won last-minute, one-month reprieves – although Washington did slap 10 percent tariffs on China.
The offshore yuan strengthened slightly to 7.2775 per dollar.
Canada’s loonie was steady at C$1.4321 versus its US counterpart after rising to the highest since December 17 at C$1.4270 overnight. The Mexican peso was steady at 20.5789 per dollar.
