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Dollar heads for weekly gains, boosted by trade optimism
The US dollar is heading for weekly gains against most major currencies on Friday, supported by growing investor optimism about upcoming US-China trade talks following the announcement of a limited trade agreement with the UK. Expectations of an imminent interest rate cut by the US Federal Reserve are also fading, after the bank indicated it is in no rush.
All eyes are now on the trade negotiations between Washington and Beijing, scheduled to begin on Saturday in Switzerland, amid hopes they will result in a reduction in tariffs that have weighed on the global economy, according to Reuters.
The euro hit a one-month low of $1.1197 overnight, down about 0.6% for the week, while the pound rose 0.2% during trading today to $1.2253.
The Japanese yen, a barometer of market sentiment, fell about 0.4% during the week, hitting a one-month low of 146.18 against the dollar, before rebounding to 145.195, leading the dollar to fall 0.5% on the day.
The British pound had earlier risen on reports of a trade deal with the United States, but it pared some of its gains after it became clear the agreement was limited in scope, hitting a three-week low of $1.3220 in early trading.
The agreement slightly expands reciprocal agricultural access and reduces high US tariffs on British car exports, without eliminating the 10% minimum.
