The dollar remained broadly higher against other major currencies on Wednesday, but gains were capped by ongoing U.S. political uncertainty and geopolitical tensions around the world.
EUR/USD was down 0.13% at 1.0718, off a three-week high of 1.0737 hit overnight.
Sentiment on the greenback remained vulnerable as trade talks between the U.S. and Japan got underway this week, with markets awaiting indications of the direction U.S. trade policy could take under President Donald Trump, who campaigned on a protectionist platform.
Heightened tensions around North Korea, which has vowed to conduct more missile tests following Sunday’s failed missile launch, also continued to weigh on the greenback.
U.S. Vice President Mike Pence said on Wednesday that Washington would work with its allies and China to put economic and diplomatic pressure on North Korea.
Markets were also jittery ahead of the first round of the French presidential election, scheduled on Sunday April 23. The race tightened after a surge in polls for far-left candidate Jean-Luc Melenchon, who wants a referendum on the country’s European Union membership.
Elsewhere, GBP/USD edged down 0.14% to 1.2823 after hitting a six-month peak of 1.2904 on Tuesday, when U.K. Prime Minister Theresa May on Tuesday called a snap election for June 8.
On Wednesday, the British Parliament approved by an overwhelming 522 votes against 13 May’s call for an early election, setting the stage what will define the terms of the U.K.’s withdrawal from the European Union.
USD/JPY climbed 0.56% to trade at 109.04, while USD/CHF eased up 0.13% to 0.9976.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.61% at 0.7514 and with NZD/USD declining 0.47% to 0.7010.
Meanwhile, USD/CAD advanced 0.44% to trade at 1.3442.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 99.62, not far from the previous session’s three-week low of 99.36.
