The dollar was mostly flat in early trade in Europe on Friday amid a lull in news ahead of more U.S. economic data later in the day.
The greenback is on course for a modest loss of around 0.2% this week, drifting as the world waits for China and the U.S. tie up an elusive trade truce.
The threat of a Chinese crackdown on unrest in Hong Kong is also keeping markets on edge. President Xi Jinping urged the city’s chief executive Carrie Lam to clamp down on protests on late on Thursday, urging “forceful actions . . . to punish those who have committed violent crimes,” according to the Financial Times.
However, the FT also cited people familiar with the matter as saying that China’s top official overseeing the territories of Hong Kong and Macau had delayed a visit to the city for fear of inflaming the situation further.
By 4 AM ET (0900 GMT), the dollar index, which tracks the buck against a basket of developed market currencies, was at 98.050, little changed from late Friday. EUR/USD and GBP/USD were both effectively unchanged at $1.1025 and $1.2880, respectively.
The dollar had received some support from two days of Congressional testimony by Federal Reserve Chairman Jerome Powell who made clear that there would be no further cuts to U.S. interest rates barring a major deterioration in the economy.
The modest uptick in jobless claims last week along with weakening producer price inflation on Thursday clearly didn’t meet that requirement, but there is the chance that U.S. and industrial production data, both due later Friday, may send stronger signals of a slowdown.
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