Yen, Swiss franc hold gains against the dollar as trade war worries deepen

The yen and Swiss franc held their gains against the USD on Wednesday as appetite for safe-havens spiked. 

Both the yen and Swiss currencies tend to trade as safe-havens during times of uncertainty.

The spike followed Trump's warning that a trade deal with China might not come until after the 2020 U.S. presidential election.

In foreign trade, Chinese yuan traded near its weakest against the dollar since October due to waning hopes for a China-US trade deal.

Traders broadly sold the dollar against other currencies, which helped the GBP to climb to its highest level against the USD in more than six months.

Trump's statement that he had no deadline for a trade deal with China weakened sentiments and roiled financial markets.

Trade friction could drag on global growth longer than many investors expected.

The diminishing hopes for a trade deal also reinforced expectations that the U.S. could carry out its plan to raise more tariffs on Chinese goods on Dec 15.

"Expectations for a U.S.-China trade deal are fading, and dollar/yen has broken its support levels, so the bias is tilted to the downside," said Takuya Kanda. 

Takuya is the general manager of research at the Gaitame.com Research Institute in Tokyo.

"More tariffs would push dollar/yen lower still," Takuya added.

On Wednesday, the yen stood at 108.54 against the dollar, close to its strongest since Nov 22.

The Swiss franc traded at 0.9875 against the dollar, near its highest level since Nov 4.

Deepening trade woes

The yuan stood at 7.0691 against the dollar, close to its weakest level since Oct 18.

On Tuesday, Wilbur Ross, the U.S. Commerce Secretary, said that while staff-level talks were ongoing with Chinese officials, no high-level meetings were scheduled.

According to Ross, if there will be no deal of substantial progress by Dec 15, then tariffs on Chinese goods will take effect.

Chinese goods include; laptops, cell phones, and toys.

The dollar index was quoted at 97.737, having skidded to a one-month low.

Meanwhile, the GBP benefited from the USD's slide and rose to $1.3014- its highest since mid-May this year.

Trump's comments on trade have caused a major stir this week.

On Monday, he said he would hit Brazil and Argentina with trade tariffs for "massive devaluation of their currencies."

He also threatened tariffs of up to 100% on French goods such as; Champagne and handbags, after France imposed a digital services tax, which Trump says harms U.S. tech companies.