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The dollar made modest gains against the yen on Friday, fueled by upbeat job statistics in the US, but those gains were limited by the hope that Washington and Beijing will succeed in repairing trade tensions. which prompted the purchase of the greenback.
Employment growth in the United States rebounded strongly in October and wages recorded the largest annual increase in nine and a half years, which could allow the Federal Reserve to continue raising interest rates in December .
"Even though we had a fairly solid payroll ratio, it still seems that the dollar's gains have been somewhat stifled," said Sireen Harajli, currency strategist at Mizuho in New York.
The dollar was up 0.44% against the yen, while the euro was down 0.12% against the greenback.
"I think there are signs that dollar gains are starting to become somewhat limited at these levels," she said.
The dollar index, which tracks the greenback's performance against the euro, the yen, the pound sterling and three other currencies, reached its highest level in 16 months on Wednesday . On Friday, the index changed little the day to 96.46.
The high number of jobs did not further favor the dollar as investors remained focused on trade-related tensions, said Juan Perez, chief foreign exchange trader at Tempus, Inc. in Washington.
The greenback attracts flows of safe havens in times of economic and political uncertainty. It was put under pressure on Friday after a Bloomberg report said President Donald Trump was seeking a trade deal with Chinese President Xi Jinping ahead of a meeting in late November in Argentina.
A trade dispute between the world's two largest economies has weighed on the global economy and has boosted greenback demand as investors believe the US is in better shape than its competitors to weather a trade war.
A Trump administration official rejected the report on a possible trade deal with China, CNBC said.
Improving confidence in risk has helped support commodity-related currencies, including Aussie and the kiwi, said Perez.
The Australian dollar, considered as an indirect indicator of China-related transactions and a barometer of risk sentiment in the broad sense, was roughly stable that day.
The pound was down 0.32% on the day, but on the pace of its strongest weekly gain since March. The pound sterling was used this week after the Bank of England announced that further interest rate increases could be considered if Britain 's exit from the Union European Union was smooth.
The Canadian dollar fell from a week earlier against the greenback after investors felt the data on employment and internal trade were not strong enough to allow to bet on a further rise in interest rates from the Bank of Canada next month.
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