Investing.com - The U.S. dollar steadied on Tuesday in Asia after the International Monetary Fund (IMF) cut its 2019 and 2020 global growth forecasts overnight.
The IMF now projects a 3.5% growth rate worldwide for 2019 and 3.6% for 2020. These are 0.2 and 0.1% points below its last forecasts in October.
The fund cited China-U.S. trade disputes, a renewed tightening of financial conditions, a “no deal” Brexit and a deeper-than-anticipated slowdown in China as the reasons for the downgrade.
The news came just hours after China reported its slowest quarterly economic growth since the financial crisis on Monday.
China's economy grew 6.4% in the fourth quarter of 2018 from a year earlier, as expected, official data from the National Bureau of Statistics showed on Monday. The growth was slower than the previous quarter's 6.5% growth.
Full-year growth for 2018 came in at 6.6%, also in line with expectations.
The U.S. dollar index edged up 0.1% at 96.058 on Tuesday following the news.
Traders are also awaiting further news on the U.S.-China trade development, as Chinese Vice Premier Liu He is set to visit the U.S. on Jan. 30 and 31 for a new round of trade talks.
The Japanese yen, another safe-haven currency, also rose on Tuesday as the USD/JPY pair lost 0.2% to 109.43.
Meanwhile, the Chinese yuan was up 0.2% to 6.8022 as the People's Bank of China set the yuan reference rate at 6.7854 vs the previous day's fix of 6.7774.
Analysts at Morgan Stanley (NYSE:MS) said in a Reuters report last week that they had turned bullish on the yuan, as they believed the People's Bank of China (PBOC) would refrain from intervening during trade talks.
Companies would also sell more dollars to buy yuan ahead of the upcoming Lunar New Year payments, the analysts added.
Elsewhere, the AUD/USD pair and the NZD/USD pair slipped 0.3% and 0.1% respectively.