2018.07.1114:51:00UTC+00Dollar Gaining Ground As Trade War Escalates

The dollar is strengthening against its major rivals Wednesday afternoon on renewed concerns over the trade war between the U.S. and China. President Donald Trump has ordered U.S. Trade Representative Robert Lighthizer to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports.

The move comes after the U.S. imposed a 25 percent tariff on $34 billion worth of Chinese imports last Friday, leading China to retaliate by imposing tariffs on $34 billion worth of U.S. exports.

Producer prices in the U.S. increased by slightly more than expected in the month of June, according to a report released by the Labor Department on Wednesday.

The Labor Department said its producer price index for final demand rose by 0.3 percent in June after climbing by 0.5 percent in May. Economists had expected prices to edge up by 0.2 percent.

A report released by the Commerce Department on Wednesday showed wholesale inventories in the U.S. increased by slightly more than expected in the month of May. The Commerce Department said wholesale inventories climbed by 0.6 percent in May after inching up by 0.1 percent in April. Economists had expected inventories to rise by 0.5 percent.

The dollar slid to a low of $1.1758 against the Euro Wednesday, but has since bounced back to around $1.1680.

The buck dipped to a low of $1.3285 against the pound sterling Wednesday morning, but has since rebounded to around $1.3215.

The greenback has broken out to a 6-month high of Y111.965 against the Japanese Yen Wednesday, from an early low of Y110.766.

Producer prices in Japan were up 0.2 percent on month in June, the Bank of Japan said on Wednesday. That was in line with expectations and down from 0.6 percent in May.

Core machine orders in Japan fell 3.7 percent on month in May, the Cabinet Office said on Wednesday - coming in at 907.9 billion yen. The headline figure beat expectations for a decline of 4.9 percent following the 10.1 percent spike in April.

Japan's tertiary activity index increased for the second straight month in May, though marginally, data from the Ministry of Economy, Trade and Industry showed Wednesday. The tertiary activity index edged up 0.1 percent month-over-month in May, following a 1.0 percent rise in April. In contrast, economists had expected a 0.3 percent decrease for the month.