The dollar dipped on Monday as markets weighed the impact of strikes on Syria by the United States and its allies at the weekend, although losses were limited as the military action did not result in broad risk aversion.
The United States, France and Britain launched
missiles targeting what the Pentagon said were chemical weapons
facilities in Syria on Saturday, in retaliation for a suspected poison
gas attack on April 7.
Suggesting that the military action
would not be prolonged, Trump declared "mission accomplished" after the
strikes. There were still concerns, however, about Russia's potential
reaction to new economic sanctions from Washington.
index against a basket of six major currencies eased 0.05 percent to
89.741.The U.S. currency was 0.1 percent lower at 107.245 yen after a
brief rise to 107.610. It was within reach of a near two-month high of
107.780 yen set on Friday.
Although the yen usually draws demand
in times of political tension and market turmoil due to its perceived
safe-haven status, the dollar's losses against its Japanese peer were
"The reaction in currencies has been limited as President
Trump had provided advance notice about a possible strike on Syria,
giving speculators ample time to brace for the actual event," said Yukio
Ishizuki, senior forex strategist at Daiwa Securities.
speculators are showing less of a response to yen-supportive factors
lately, after the Bank of Japan made clear it was not going to normalize
policy soon. This goes for domestic factors as well, like falling
support ratings for (Japan Prime Minister Shinzo) Abe."
for Prime Minister Shinzo Abe, plagued by accusations of cronyism and
cover-ups, fell to 26.7 percent in a survey by private broadcaster
Nippon TV released on Sunday, the lowest since he took office in
Still, others saw diminishing popularity for Abe at
home weakening his position when he meets President Trump at the April
17-18 U.S.-Japan summit, possibly providing fresh impetus for some
participants to bet on renewed yen appreciation.
speaking, the dollar has broken above resistance against the yen. But
given potential political developments, the bounce could only go as far
as 108.44 yen, the 38.2 percent Fibonnaci retracement from last month's
low and the November high," said Makoto Noji, chief strategist at Nikko
The euro inched up 0.05 percent to $1.2335 after
ending Friday little changed.The pound was 0.2 percent higher at $1.4261
after rising to a near three-month high of $1.4296 on Friday.
Expectations of a rate rise from the Bank of England have been a major driver of sterling's gains in recent days.
The Australian dollar added 0.05 percent to $0.7773 and the New Zealand dollar was little changed at $0.7354.
The Hong Kong dollar was at 7.8500 per dollar and at the weak end of its trading band.
Hong Kong Monetary Authority (HKMA) stepped in last week to prop up the
Hong Kong dollar, as it is obliged to intervene and keep intact a
trading band of 7.75 to 7.85.