Dollar bounces on rise in yields as trade war roils markets

dollar rebounded slightly on Thursday thanks to a rise in U.S. Treasury yields, though currencies traded in tight ranges as investors struggled to determine the impact of an escalating global trade war on U.S. inflation and growth.

U.S. President Donald Trump on Wednesday threatened further tariffs on European Union goods, as major U.S. trading partners said they would retaliate for trade barriers already erected by him.

A rise in global trade tensions and worries over U.S. recession risks have rattled global markets and sparked huge volatility in the foreign exchange market, as traders seesaw between relief and angst over Trump's whipsawing policy changes.

Markets were a tad calmer in the early Asian session on Thursday as investors got a break from the flurry of headlines about U.S. trade policy.

The dollar rose 0.05% against the yen to 148.31, recovering some of its losses from earlier in the week when it fell to a five-month low against the Japanese currency, as fears of an economic downturn in the U.S. sparked a rush to the Japanese currency as a safe haven.

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The Swiss franc similarly edged away from Monday's three-month peak and last stood at 0.8817 per dollar.

Data released on Wednesday showed U.S. inflation rose slightly less than expected in February, but the relief it offered could be temporary as the data did not fully capture the cascade of Trump's tariffs.

«What is more uncertain is the outlook for future inflation and the state of U.S. economic activity, thanks largely to the