The dollar remained moderately higher against other major currencies in quiet trade on Wednesday, although U.S. political uncertainty and geopolitical tensions around the world continued to dominate investors’ attention.
EUR/USD slipped 0.10% to 1.0720, 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.
GBP/USD held steady at 1.2851 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.
Analysts expect May to win a substantial majority in the elections, securing her position ahead of talks with the European Union about the terms for Brexit.
USD/JPY climbed 0.55% to trade at 109.03, while USD/CHF eased up 0.09% to 0.9973.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.48% at 0.7524 and with NZD/USD declining 0.40% to 0.7015.
Meanwhile, USD/CAD rose 0.37% to trade at 1.3432.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.16% at 99.57, off the previous session’s three-week low of 99.36.