U.S. Dollar Falls As China Retaliates Against U.S. Tariffs

(RTTNews) - The U.S. dollar continued to trade lower against other major currencies in the Asian session on Wednesday, as China imposed tariffs on U.S. goods, like as liquefied natural gas and oil.

China's Finance Ministry said it will impose a 15 percent duty on imports of coal and liquified natural gas from the U.S. Also, there will be 10 percent additional duty on imports of crude oil, agricultural equipment and automobiles from the U.S. from February 10.

Traders are cautious and are concerns about a global trade war after President Donald Trump decided to impose tariffs on imports from China, Mexico and Canada, with the trading partners retaliating with counter tariffs.

Positive sentiment was generated in reaction to a report showing job openings in the U.S. fell by much more than expected in December, leading to some optimism about the outlook for interest rates.

The Labor Department released a report on Tuesday showing job openings in the U.S. tumbled to 7.6 million in December after climbing to an upwardly revised 8.2 million in November. Economists had expected job openings to dip to 8.0 million from the 8.1 million originally reported for the previous month.

The U.S. dollar traded lower against its major rivals since Monday.

In the Asian trading today, the U.S. dollar fell to a 5-day low of 1.0410 against the euro and a 9-day low of 1.2506 against the pound, from yesterday's closing quotes of 1.0371 and 1.2475, respectively. If the greenback extends its downtrend, it is likely to find support around 1.06 against the euro and 1.27 against the pound.

Against the yen and Swiss franc, the greenback slid to nearly a 2-month low of 153.08 and a 1-week low of 0.9029 from Tuesday's closing quotes of 154.15 and 0.9054, respectively. The greenback may test support around 150.00 against the yen and 0.89 against the franc.

Against the Australia and the New Zealand dollars, the greenback dropped to an 8-day low of 0.6274 and a 5-day low of 0.5675 from yesterday's closing quotes of 0.6250 and 0.5647, respectively. On the downside, 0.89 against the franc and 0.66 against the aussie are seen as the next support levels for the greenback.

The greenback dropped to more than a 2-week low of 1.4296 against the Canadian dollar, from yesterday's closing value of 1.4339. The next possible downside target for the greenback is seen around the 1.42 region.

Looking ahead, U.K. S&P Global services and composite PMI for January and Eurozone PPI for December, are slated for release in the European session.

In the New York session, U.S. MBA mortgage approvals data, U.S. and Canada trade data for December, services PMI data for January and U.S. EIA crude oil data are set to be published.