Asia markets finished mostly higher on Wednesday, as the dollar index retreated from levels above 102 reached in the previous week, fueled by remarks from President-elect Donald Trump.
Trump spoke to the Wall Street Journal and remarked the greenback was already "too strong," partly because China was keeping the yuan weak, and that stateside companies are unable to compete with their Chinese counterparts as a result.
His remarks had sent the dollar index, a trade-weighted basket of currencies, from levels above 102.80 last week to the 100 handle this week. On Wednesday afternoon Asia time, the dollar traded at 100.63 after hitting an intraday session low of 100.32.
A stronger dollar can boost earnings for exporters paid in greenbacks, but a weaker level also makes imports cheaper for commodities priced in the U.S. currency
"It was a matter of time that Trump's diametrically opposed policy objectives (fiscal expansion and protectionist bias) and outcomes (higher U.S. Treasury yields and consequently stronger dollar) came home to roost," Vishnu Varathan, a senior economist at Mizuho Bank, pointed out in a note.
Meanwhile, the British pound saw its biggest one-day gain against the dollar overnight since October 2008, after Prime Minister Theresa May announced her plan for a clean break between the U.K. and the European Union. The pound rose from levels near $1.20 to about $1.24.
On Wednesday afternoon during Asian hours, Cable retreated to $1.2346, from an earlier high of $1.2415.