On Thursday the dollar recovered after fears of a trade war between the two biggest economies in the world began to fade.
This came after news reports that China and the Trump administration were negotiating a solution.
Traders risk appetite improved with the main indexes on Wall Street advancing. U.S. equities stormed back which helped the dollar recoup. Against a basket of six major currencies the dollar recouped some of its losses gaining 0.2 percent to 90.32.
The euro slid 0.2 percent against the dollar to $1.228.
The Japanese yen fell 0.2 percent to 106.80 per dollar.
Risk of Retaliation
Investors are concerned that there might still be a fallout in the trade dispute after China imposed tariffs on a number of U.S. imports, targeting soybeans, planes, cars, beef and chemicals on Wednesday in a tit for tat response to the U.S. tariffs on Chinese imports.
According to currency strategist at ING in London, Viraj Patel who said that the number one risk for investors after China imposed tariffs on U.S. imports is a trade war. For it to spill over into the currency arena it would have to heat up.
Who Will Benefit?
The question is, who will benefit if the stand-off between China and the U.S. continues and how will it affect the dollar?