Dollar Eyes Weekly Rise into US-China Trade Talks
The dollar headed for a weekly gain on most major peers on Friday as a US-UK trade deal raised hopes of progress in looming US-China talks, while bets of imminent Fed rate cuts receded after the central bank indicated it was in no hurry.
Financial markets are heading into the weekend with the focus squarely on trade negotiations between Washington and Beijing due to begin on Saturday in Switzerland.
The euro touched a one-month low of $1.1197 in Asia and was down about 0.6% for the week. The yen has weakened about 0.4% this week and hit a one-month trough of 146.18 per dollar, before steadying around 145.48 on Friday.
Sterling, which had rallied on news reports of an impending US-UK trade deal, gave back gains when the agreement turned out to be pretty limited and struck a three-week low of $1.3220 in early trade on Friday.
The “general terms” agreement modestly expands agricultural access for both countries and lowers prohibitive US duties on British car exports, but leaves in place the 10% baseline.
“The market reaction of buying USD may reflect greater optimism that such tariff deals are doable,” said Steve Englander, global head of G10 currency research at Standard Chartered, in a note to clients.
