- China yuan falls to five-month low in offshore market
- Jittery traders pile into safe-haven yen, Swiss franc
- Trade war fears pummel commodity, emerging market currencies
- Euro under pressure, Sintra forum eyed for more ECB rate clues
(Updates market action, changes dateline, previous LONDON)
The dollar, yen and Swiss franc rose on Tuesday as traders piled into perceived less risky currencies after U.S. President Donald Trump threatened to slap more tariffs on China, fanning a trade dispute between the world's two biggest economies.
Trump said he would impose a 10 percent tariff on $200 billion of Chinese goods, following levies on $50 billion worth of Chinese imports enacted last week.
China's commerce ministry warned on Tuesday that Beijing would fight back firmly with "qualitative" and "quantitative" measures if the United States implements more tariffs.
Fears of a trade war that could harm global growth spurred sales of the Chinese yuan, which fell to a five-month trough in the offshore market, as well as commodity-linked and emerging market currencies.
Worries about a growing U.S.-China trade spat also sparked a selloff in stock markets around the world.
"A pending trade war and a selloff in global equities is benefiting the yen and dollar," said John Doyle, vice president of dealing and trading at Tempus Inc in Washington. "Emerging market currencies, especially the South African rand, are taking the bulk of the heat."
The index that tracks the greenback against the euro, yen, sterling and three other currencies .DXY reached 95.296, the highest since last July. It was last up 0.35 percent at 95.133.
The yen climbed 0.5 percent at 109.95 yen per dollar JPY= , while it advanced 1 percent versus the euro to 127.09 yen EURJPY= , its strongest in over two weeks.
The Swiss franc increased 0.6 percent against the euro at 1.1495 franc EURCHF= and was marginally higher versus the greenback CHF= at 0.9948 franc.
Among the day's losers, the yuan weakened to 6.491 to the dollar in the offshore market CNH=D3 , the lowest in five months.
"Of course a far-reaching trade war would be detrimental for everyone in the end, but mainly the countries whose growth heavily depends on foreign trade," said Commerzbank currency strategist Thu Lan Nguyen in Frankfurt.
The Australian dollar AUD=D4 sagged to a one-year low of $0.73475 as the trade tension hurt base metal prices CMCU3 .
The Canadian dollar fell to a one-year low of C$1.3291 on worries about Canada's own trade feud with the United States. CAD=D4
In emerging markets, the South African rand ZAR= tumbled to its weakest level in nearly seven months at 13.7895 rand per dollar.
In addition to trade concerns, the euro EUR= slumped to a two-week low of $1.1528 after European Central Bank President Mario Draghi called for a patient approach to European monetary policy at a forum in Portugal.
The single currency was also under pressure as German Chancellor Angela Merkel's Bavarian allies may defy her by implementing a plan to limit immigration at the German border, which could destabilise her three-month-old coalition.
======================================================== Currency bid prices at 9:43AM (1343 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1555 $1.1622 -0.58% +0.00% +1.1644 +1.1531 Dollar/Yen JPY= 109.9600 110.5400 -0.52% +0.00% +110.5700 +109.5600 Euro/Yen EURJPY= 127.07 128.48 -1.10% +0.00% +128.5100 +126.6600 Dollar/Swiss CHF= 0.9947 0.9950 -0.03% +0.00% +0.9977 +0.9919 Sterling/Dollar GBP= 1.3171 1.3242 -0.54% +0.00% +1.3273 +1.3151 Dollar/Canadian CAD= 1.3271 1.3198 +0.55% +0.00% +1.3291 +1.3196 Australian/Doll AUD= 0.7364 0.7421 -0.77% +0.00% +0.7427 +0.7348 arEuro/Swiss EURCHF= 1.1495 1.1564 -0.60% +0.00% +1.1571 +1.1488 Euro/Sterling EURGBP= 0.8771 0.8774 -0.03% +0.00% +0.8781 +0.8754 NZ Dollar/Dolar NZD= 0.6891 0.6942 -0.73% +0.00% +0.6943 +0.6886 Dollar/Norway NOK= 8.2014 8.1258 +0.93% +0.00% +8.2277 +8.1148 Euro/Norway EURNOK= 9.4784 9.4456 +0.35% +0.00% +9.5155 +9.4427 Dollar/Sweden SEK= 8.9286 8.8142 +0.72% +0.00% +8.9499 +8.8086 Euro/Sweden EURSEK= 10.3186 10.2449 +0.72% +0.00% +10.3465 +10.2438 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ CME euro futures http//reut.rs/2yom8PaWorld FX rates in 2018 http://tmsnrt.rs/2egbfVh
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