The US dollar on Friday gave up early gains to trade slightly lower on the day against a basket of currencies as a still-unsigned partial US-China trade deal kept investors on edge and the shortened holiday week in the US limited currency moves.
The US dollar index, which compares the greenback against six other major currencies, fell 0.1 percent to at 98.27. Earlier in the session, the index rose as high as 98.544, its highest since Oct. 15.
The index was unchanged for the week.
China on Thursday warned the US that it would take “firm countermeasures” in response to US law backing pro-democracy protesters in Hong Kong, and said attempts to interfere in the Chinese-ruled territory were doomed to fail.
US President Donald Trump on Wednesday signed into law congressional legislation that supported the protesters, despite angry objections from Beijing, with which he is seeking a deal to end a damaging trade dispute.
“I think it’s a lackluster market mood today, that tone was set with the muted FX response to Trump signing the HK bill late on Wednesday,” said Amo Sahota, director at Klarity FX Inc in San Francisco.
“Late session gains for sterling and euro have weighed on the US dollar, and it looks like enough work has been done to prevent US dollar index closing above 98.45, which would have setup a bullish range break,” Sahota said.
The euro rose 0.09 percent against the greenback after data showed that eurozone inflation accelerated faster than expected last month on a rise in food and services prices.
For the week, the common currency was unchanged against the US dollar at US$1.10.
Annual inflation rates remained far lower than European Central Bank expectations.
The pound hovered about US$1.29 on Friday, showing little reaction to political headlines, with analysts expecting little movement in the run-up to the UK general election on Dec. 12.
The pound rose 0.8 percent for the week.
In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.008 to close at NT$30.513, little changed from last week’s NT$30.517.
Against the Japanese yen, which tends to attract investors during times of geopolitical or financial stress as Japan is the world’s biggest creditor nation, the US dollar slipped 0.09 percent to ¥109.48, up 0.8 percent for the week.
“The dollar index is lower on the session, but on the month it has been solid,” Sahota said.
For the month, the index was up 0.9 percent, its best monthly performance since July.
The US currency has found support recently from positive economic data that show the world’s biggest economy is on a firm footing.
US economic growth picked up slightly in the third quarter, data showed on Wednesday, in contrast to other indicators pointing to a slowdown in global activity.
Additional reporting by CNA, with staff writer
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