US Markets

Dollar hits 3-week high; yen rises on renewed trade uncertainty

Credit: REUTERS/THOMAS WHITE

The dollar rose to a three-week high on Friday, getting some safe-haven bids, as risk appetite for higher-yielding currencies took a step back amid renewed uncertainty about the rollback of existing tariffs, a major component of a preliminary U.S.-China trade deal.

By Gertrude Chavez-Dreyfuss

NEW YORK, Nov 8 (Reuters) - The dollar rose to a three-week high on Friday, getting some safe-haven bids, as risk appetite for higher-yielding currencies took a step back amid renewed uncertainty about the rollback of existing tariffs, a major component of a preliminary U.S.-China trade deal.

The yen, another safe haven, rose as well.

U.S. President Donald Trump on Friday further heightened the uncertainty, saying he has not agreed to roll back tariffs.

His comments came a day after U.S. and Chinese officials reportedly agreed to roll back tariffs on each others' goods in a "phase one" trade deal if it is completed.

But a report also on Thursday seemed to contradict that news, with multiple sources familiar with the talks saying the rollback faces fierce internal opposition at the White House and from outside advisers. The idea of a tariff rollback was not part of the original October "handshake" deal between Chinese Vice Premier Liu He and Trump, these sources said.

"We had a lot of conflicting headlines and reports on the U.S.-China trade negotiations, specifically whether or not a phase one trade deal ... would include a reduction of existing tariffs," said Brian Daingerfield, head of G10 FX strategy, at Natwest Markets in Stamford, Connecticut.

"So that's what really has been driving the market: this underlying uncertainty over whether or not we will get that rollback," he added.

Overall, though, sentiment is likely to remain supportive for the dollar, equities, and other risky assets as efforts are being made to do a trade deal, which removes a huge risk to the global economic outlook.

"The fact that there is some discussion of moving existing tariffs leans more positive," Daingerfield said.

White House spokeswoman Stephanie Grisham told Fox Business Network in an interview on Friday that tariffs could be lifted on Chinese goods if an agreement is reached, but she gave no further details.

In midmorning trading, the dollar index rose 0.2% to 98.329 .DXY after earlier hitting a three-week high, led by gain against the euro, which dipped 0.2% to $1.1024 EUR=.

The dollar, however, fell 0.1% against the safe-haven yen to 109.18 yen JPY=

The Canadian dollar, meanwhile, fell against the greenback after data showed the Canadian job market stagnated unexpectedly in October, losing 1,800 net positions, while the unemployment rate remained at 5.5%.

The U.S. dollar was last up 0.5% at C$1.3235 CAD=D3.

"The sharp drop in manufacturing employment confirms the Bank of Canada's fears that weak global demand is starting to weigh more heavily on the economy," said Stephen Brown, senior Canada economist, at Capital Economics.

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Currency bid prices at 10:19AM (1519 GMT)

Description

RIC

Last

U.S. Close Previous Session

Pct Change

YTD Pct Change

High Bid

Low Bid

Euro/Dollar

EUR=

$1.1021

$1.1049

-0.25%

-3.91%

+1.1055

+1.1022

Dollar/Yen

JPY=

109.2000

109.2700

-0.06%

-0.96%

+109.4700

+109.1000

Euro/Yen

EURJPY=

120.38

120.75

-0.31%

-4.63%

+120.8700

+120.3300

Dollar/Swiss

CHF=

0.9957

0.9948

+0.09%

+1.46%

+0.9972

+0.9944

Sterling/Dollar

GBP=

1.2811

1.2813

-0.02%

+0.42%

+1.2824

+1.2796

Dollar/Canadian

CAD=

1.3220

1.3169

+0.39%

-3.06%

+1.3236

+1.3166

Australian/Dollar

AUD=

0.6858

0.6897

-0.57%

-2.71%

+0.6906

+0.6852

Euro/Swiss

EURCHF=

1.0978

1.0992

-0.13%

-2.45%

+1.1005

+1.0979

Euro/Sterling

EURGBP=

0.8601

0.8621

-0.23%

-4.26%

+0.8630

+0.8600

NZ Dollar/Dollar

NZD=

0.6333

0.6364

-0.49%

-5.72%

+0.6381

+0.6326

Dollar/Norway

NOK=

9.1526

9.1088

+0.48%

+5.95%

+9.1646

+9.1057

Euro/Norway

EURNOK=

10.0887

10.0645

+0.24%

+1.84%

+10.1185

+10.0618

Dollar/Sweden

SEK=

9.7048

9.6275

+0.55%

+8.27%

+9.7119

+9.6249

Euro/Sweden

EURSEK=

10.6963

10.6381

+0.55%

+4.21%

+10.7109

+10.6354

(Reporting by Gertrude Chavez-Dreyfuss; editing by Jonathan Oatis)

((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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