The U.S. dollar strengthened on Friday amid myriad economic data and Congressional moves that appear set to avoid a partial government shutdown, with President Trump expected to declare a national emergency on border security.
“Currencies were in a holding pattern on the final trading day of the week with majors contained to 20 pip ranges in Asian and European sessions as traders were content to tread water awaiting fresh news on the U.S.-China trade negotiations,” said Boris Schlossberg, managing director of currency strategy at BK Asset Management.
In the latest developments, trade talks are set to continue in Washington next week, after a round in Beijing wrapped up Friday with gridlock over key issues remaining. Friday morning, the White House said some progress had been made during the talks, while Chinese news agency Xinhua said ‘important progress’ had been made.
Meanwhile, President Donald Trump is expected to sign a budget deal avoiding a renewed partial government shutdown late in the day, but he may also declare a state of emergency at the country’s southern border.
Read: If Trump declares an emergency, here’s where the money to build a border wall might come from
The ICE U.S. Dollar Index
DXY, +0.13%
was up 0.1% to 97.167, reversing Thursday’s slide that came on the back of weaker than expected December retail sales. For the week, the gauge is on track for a 0.5% gain, according to FactSet. It would be its second weekly gain in a row.
Friday’s data showed a 0.5% contraction in import prices, while the Empire state manufacturing index climbed to 8.8 from 3.9 previously. Industrial production and capacity production for January both undercut expectations, while consumer sentiment for February climbed to 95.5, topping the consensus forecast and previous read.
In Europe, European Central Bank official Benoît Coeuré said it was possible for the central bank to engage in another targeted longer-term refinancing operation, or TLTRO, which sent European banking stocks higher. Coeure also said that eurozone inflation was shallow. Sluggish economic data in the eurozone and its constituents have been overshadowing hopes for a first ECB interest-rate increase this year.
The euro
EURUSD, -0.2744%
slipped to $1.1265, compare with $1.1298 late Thursday.
Don’t miss: Gloomy German GDP reading underlines the euro’s problems
In European political news, Spain’s Prime Minister Pedro Sanchez called a snap election for late-April after his minority government was unable to get parliamentary approval for its budget proposal.
The British pound
GBPUSD, +0.4296%
was little changed at $1.2822, after January retail sales earlier showed signs of strength, beating expectations both on the month and on the year.
The Japanese yen
USDJPY, +0.04%
was also little changed, with one dollar buying ¥110.49.
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Source : MTV
