The US Dollar gained against a basket of currencies after Steven Mnuchin, The U.S. Treasury Secretary, suggested that a strong dollar would be a good thing over a longer period of time. Reuters reported that with those comments the USD reached as high as 109.05 against the yen.
Tensions on the Korean peninsula have contributed to the dollar rise as a “risk-off” mentality takes effect among traders. Among the recent activity in that region:
- North Korea’s attempt to launch a ballistic missile last Sunday failed spectacularly with the entire missile blowing up, barely leaving the launch pad.
- U.S. President Trump continues to take a hard line with his North Korean related rhetoric and tweets
- U.S. Vice President is in South Korea where the North Korean situation is expected to take center stage in any discussions
However, Vassili Serebriakov who is a foreign exchange strategist out of Credit Agricole in New York, believes that there is less of a “risk-off” appetite than others believe. In a statement reported by Reuters he stated:
I think we started out in a risk-off mode but then that’s been unwinding in a more risk favorable way