Optimism for a U.S.-China trade deal helped the dollar hit a three-week high against the yen on Friday, although moves in broader foreign exchange markets were limited as investors saw a lot of headlines but no conclusions out of the trade talks.
Xinhua reported that Chinese President Xi Jinping had said progress was being made in trade talks with Washington and called for an early conclusion of negotiations.
U.S. President Donald Trump said on Thursday a deal could be announced in about four weeks, but warned it would be difficult to let China trade with the United States if remaining issues were not resolved.
The dollar rose to a three-week high of 111.8 yen per dollar while holding firm against most other currencies. The offshore yuan also rose 0.2 percent to 6.7065.
Against a basket of currencies the dollar was flat, however, and the European session opened with most major currencies trading in tight ranges.
The focus for the day is U.S. labour market data due out at 1230 GMT, which will help traders decide how the U.S. economy is holding up. MUFG analysts said the market was “struggling for direction” before the jobs report.
Expectations are for a rebound in jobs growth in March and a weak February. ING analysts said that should the data show 160,000 to 170,000 jobs were produced in March the dollar would gain.
“Such an NFP (non-farm payrolls) release should prove slightly positive for the dollar against the low-yielders ($/JPY to 112.20), but probably good for risk assets in general – confirming that US domestic demand should stay strong and allaying recession fears,” they said in a note.
The euro rose slightly to 1.1228, its gains capped after data released on Thursday showed German industrial order dropped in February.
Sterling strengthened back towards $1.31 as a senior European Union source said Donald Tusk was likely to offer Britain a flexible extension of the date of the country’s exit from the bloc of up to one year.
The pound was up 0.2 percent at $1.3093.
The Australian dollar rose 0.2 percent to $0.71245.
The currency has risen this week, supported as signs of progress in the U.S.-China trade dispute lifted risk assets and commodity prices