The dollar was consolidating in early trade in Friday after surging to a three-week high on Thursday in response to growing confidence that the economically damaging tariffs enacted by the U.S. and China on each other’s products will be reversed.
The Japanese yen, a haven currency that has suffered particularly badly as hopes for a trade settlement have grown staged a modest comeback overnight after stronger-than-expected household spending numbers for September overnight.
The pound, meanwhile, was opening flat. It hit a two-week low on Thursday, dipping briefly below $1.2800 after the Bank of England adopted a more dovish outlook about the possible need for interest rate cuts.
The euro has also traded weaker since Thursday morning when the European Commission’s forecast reflected low expectations for the kind of fiscal stimulus that many, including the European Central Bank and International Monetary Fund, say is needed to revive the euro zone economy.
The European session remains data light, while the U.S. data calendar for Friday is led by the University of Michigan’s consumer sentiment survey and the US Wholesale Inventories due at 15:00 GMT.
Meanwhile, the speech by the Fed Official Brainard will be closely heard and for the oil market, the Baker Hughes US Oil Rig Count data will be next of relevance.
Oil prices gave back some of their gains from earlier in the day after China said they are rolling back tariffs with the U.S. currently trading at mid-$56.00, while Gold rebounded on Friday but is still set to record the worst week in two years amid positive Sino-U.S. trade news. The yellow metal took a sharp knock on Thursday in reaction to positive trade-related developments, however conflicting reports helped limit further losses, rather regain some traction.