* Dollar index dragged back down after popping to 3-week
* Markets await US-China summit and geopolitical
* Safe-haven yen buoyed as risk-averse mood lingers
* Aussie hits 4-week low on Xi-Trump nerves
(Updates prices, adds detail and quotes)
By Shinichi Saoshiro
TOKYO, April 6 The dollar slipped against a
basket of currencies on Thursday, weighed down by caution over
the impending U.S.-China summit and geopolitical concerns.
The dollar index versus a basket of six major currencies was
down 0.1 percent at 100.480.
It had risen to a three-week high of 100.850 overnight on an
upbeat ADP report on U.S. private sector employment.
But the currency tumbled from the three-week high despite
hawkish-sounding minutes from the latest Federal Reserve
meeting, which showed most policymakers think the Fed should
begin trimming its $4.5 trillion balance sheet later this year.
"Although the contents of the Fed minutes should have been
supportive for the dollar, it was dragged down by ensuing price
action in other markets, which saw equities react negatively to
the minutes and Treasury yields fall," said Shusuke Yamada,
senior strategist at Bank of America Merrill Lynch in Tokyo.
Wall Street shares reversed an earlier rally and slipped on
Wednesday, with sentiment soured as the Fed's minutes showed
some policymakers viewed equity prices as quite high relative to
standard valuation measures.
"Geopolitical risks are also weighing on the dollar. The
market is only starting to factor in recent developments
regarding North Korea, and it now wants to figure out the
geopolitical implications of the U.S.-China summit," Yamada
Regional tensions have risen after North Korea test-fired a
ballistic missile on Wednesday, just a day before a summit
between U.S. President Donald Trump and Chinese President Xi
Jinping, where North Korea's arms development drive will take
Financial markets are nervous over the summit because of
Trump's constant criticism of China's economic policies.
That caution has crimped broader investor risk appetite this
week, depressing U.S. Treasury yields and dimming the dollar's
With the broader markets in a risk-averse mood, the Japanese
yen gained on its perceived safe-haven status.
The dollar was down 0.2 percent at 110.500 yen,
having slid from a high of 111.450 struck overnight.
"The dollar looks to remain under pressure, barring
developments like a swift passage of the president's budget by
the U.S. Congress or an agreement on tax reform," said Masafumi
Yamamoto, chief currency strategist at Mizuho Securities in
The euro rose 0.1 percent to $1.0674.
The Australian dollar fell to a four-week low on nerves
ahead of the Xi-Trump summit. The currency is sensitive to
potential developments in China, Australia's main trade
The Aussie was down 0.4 percent and near $0.7537,
its lowest since March 10.
The pound was steady at $1.2479, after rising
overnight on data showing growth in Britain's services sector.
(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)