The dollar rises as trade tensions between the US and China persist, data on employment help

NEW YORK (Reuters) – The dollar rose Friday against the yen and the euro, fearing that a trade deal between the United States and China is not imminent to reduce the appetite of the dollar. risk and stimulate the demand for safe havens for the greenback.

White House economic adviser Larry Kudlow told CNBC that President Donald Trump had not asked US officials to develop a draft business plan for China. He also denied a Bloomberg report that Trump had asked officials to draft a deal.

Kudlow also said that he was not as optimistic as in the past about reaching an agreement between the two countries and said that Mr Trump "could pull the trigger" on additional tariffs on imports from China, depending on the status of the negotiations.

Meanwhile, Trump told reporters that much progress has been made with China in trade, and he predicted that the two largest economies in the world would have a very good deal.

The risk sentiment deteriorated after Kudlow's remarks and this then led to increased demand for safe haven dollars, said Juan Perez, senior currency trader at Tempus, Inc. in Washington.

The dollar was up 0.51% against the yen, while the euro was down 0.19% against the greenback.

"By simply looking at the evolution of the US dollar over the last two days, the headlines surrounding the US-China talks – progress or non-progress – help to shift the sense of risk, which helps to make fluctuate the US dollar, "said Eric Viloria, FX strategist at Crédit Agricole in New York.

Investors' view that the United States would be better equipped than its rivals to overcome a trade war has helped boost demand for dollars.

On Friday, the dollar was also supported by data showing that employment growth in the United States rebounded sharply in October and that wages recorded their largest annual increase for 9 and a half years, which could allow the Federal Reserve to raise rates in December.

But the rise in employment data related to the dollar has been relatively moderate.

"I think there are signs that dollar gains are starting to become somewhat limited at these levels," said Sireen Harajli, currency strategist in Mizuho, ​​New York.

The .DXY dollar index, which tracks the greenback against the euro, the yen, the pound sterling and three other currencies, rose 0.25% to 96.519. It hit a 16-month high on Wednesday.

The CNH = D3 offshore yuan traded at 6.8928 for a dollar at 19.00 GMT, after peaking at 6.8525, its highest level since 24 September.

The pound is down 0.32% on the day, but on the heels of its biggest weekly gain in seven weeks. 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, the Canadian dollar = fell from a week earlier against the greenback after investors felt that data on employment and domestic trade were not strong enough to build on a further rise in Bank of Canada interest rates next month.

GRAPHIC-World exchange rates in 2018 – tmsnrt.rs/2egbfVh