Optimism that the US and China might soon end their trade dispute after White House economic adviser Larry Kudlow on Thursday said a deal was “getting close” lifted trade-exposed currencies on Friday at the expense of safe-haven assets such as the yen.
However, given the lack of concrete detail in Kudlow’s comments, markets stayed mostly cautious.
The US dollar index, which compares the greenback against six major currencies, on Friday fell 0.2 percent to 98, down 0.4 percent for the week.
“To be blunt, such rhetoric is more or less the same as [US Secretary of the Treasury] Steven Mnuchin [who] said months ago that a deal was ‘99% done,’” Commerzbank AG analysts wrote in a note to clients, though they acknowledged the comments had benefited sentiment.
They said the comments could not be taken seriously until the trade documents could be assessed and a deal was signed.
The US dollar on Friday rose 0.3 percent versus the yen to ￥108.77, suggesting that an end to the past week’s US dollar-yen slump might be in sight. For the week, the greenback lost 0.4 percent against the yen.
The Swiss franc weakened 0.1 percent versus the greenback on Friday.
The New Zealand and Australian dollars firmed slightly on the news, the latter rising off four-week lows.
In Taipei, the New Taiwan dollar rose against the greenback, gaining NT$0.044 on Friday to close at NT$30.538, down 0.4 percent for the week.
While the Chinese Ministry of Commerce said that the two countries were holding “in-depth” discussions and US President Donald Trump on Tuesday said that a deal was close, the Financial Times, citing sources, said an agreement might not be reached in time to avoid a new round of US tariffs taking effect on Dec. 15.
US Secretary of Commerce Wilbur Ross said that Trump has not indicated any change on the Dec. 15 tariffs, that there would be another trade call with China on Friday and that there is a “very high probability” that a trade deal would be reached.
The Norwegian crown strengthened about 0.6 percent versus the US dollar and 0.4 percent versus the euro, while the Swedish crown tracked these gains, but to a lesser extent.
The Swiss franc — which fell below the 1.09 threshold on Thursday when risk aversion gripped markets — recovered to trade at 1.09185 per euro, up 0.2 percent on the day.
The euro posted its biggest weekly fall against the franc since early August, raising speculation the Swiss National Bank has stepped back from its interventionist policy, but the central bank reiterated on Thursday its willingness to intervene to stop the currency strengthening too much.
The euro rose 0.2 percent against the greenback to US$1.11, up 0.3 percent for the week.
Additional reporting by staff writer and CNA
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