Dollar poised for third weekly gain on trade optimism; Aussie climbs
Business
It is poised for a 0.5% gain in a week of relatively light trading due to holidays
TOKYO (Reuters) - The U.S. dollar headed for a third straight weekly gain as signs of progress in Washington's talks with some of its trading partners and better-than-expected data eased concerns over investments in the world's largest economy.
The Aussie dollar climbed as Asian shares carried on a rally on Wall Street amid renewed optimism for riskier assets. The yen touched a three-week low.
The greenback, U.S. Treasuries and shares have bounced from steep declines last month as President Donald Trump's erratic tariff policies drove fears of a recession and sapped confidence in U.S. assets.
"The dollar was hit so badly in the immediate aftermath of the tariffs, so now in the broad picture there's a normalisation in the market," said Alvin Tan, an independent currency analyst based in Singapore.
"The market is keeping one eye on the economic situation, but the other eye is looking for positive developments in China," he added.
U.S. Secretary of State Marco Rubio told Fox News late on Thursday that talks with China will come up soon. His comments came on the heels of a Chinese state media report seen as a signal of Beijing's openness to trade negotiations.
Beijing is "evaluating" an offer from Washington to hold talks over Trump's tariffs, China's Commerce Ministry said on Friday.
U.S. stocks rose on Thursday, driven by positive tech earnings and a slightly better-than-expected manufacturing report even though it showed factory activity contracted further last month.
The focus now turns to the release of nonfarm payrolls figures later in the global day.
"Better data will lift U.S. 2-year Treasury yields, and see the USD and U.S. equity push higher, with the selling in gold accelerating," Chris Weston, head of research at Pepperstone, wrote in a note.
The dollar index was little changed in early Asia trading, poised for a 0.5% gain in a week of relatively light trading due to holidays. The greenback traded at 145.45 yen , after earlier touching 145.91, the strongest since April 10.
The euro edged up 0.1% to $1.1299 from near a three-week low. The Aussie dollar rose 0.4% to $0.6396, and New Zealand's kiwi dollar added 0.3% to $0.5827.
Over in Japan, the nation's lead trade negotiator emerged from his latest round of talks in Washington telling reporters he wanted to hold another meeting in mid-May.
In Tokyo, Prime Minister Shigeru Ishiba said the talks were forward looking but the two sides had not yet found common ground.
Overnight, data showed U.S. initial jobless claims in the latest week surged to a two-month high.
Market participants are now looking to the nonfarm payrolls report for an indication on when the Federal Reserve will resume cutting rates. Wall Street economists are forecasting 130,000 new jobs created last month, compared with a print of 228,000 seen in March.
"Our view is that the FOMC needs time and more data to assess the impact of tariffs on inflation," ANZ analysts said in a note to clients.
"As long as the labour market holds up, the FOMC will focus on inflation."
