The dollar clung onto gains on Friday after a wave in U.S. retail sales eased concerns in regards to the world’s top economy, however, merchants cautioned towards studying too much into one piece of data given the developing risks to the outlook.
The dollar was on course for a weekly gain against safe-haven currencies such because of the Japanese yen and the Swiss franc, steering to some delay for frayed nerves after fears of recession and protests in Hong Kong knocked financial markets.
Throughout Asian trading, the dollar briefly extended gains, and the yen fell as Japanese shares erased early losses to commerce more considerable and as U.S. Treasury yields rose barely. The move quickly faded, however, partly reflecting skinny treading as a result of the summer holiday season.
In opposition to a group of six major currencies, the dollar index edged higher to 98.218. Since hitting a 3-week low on Aug. 9, the dollar index has recovered, rising around 1%.
Data showing American customers continued to splurge in July came as an aid to investors after the U.S. bond market rang alarms of a recession.
But, the fragile calm in markets is unlikely to last, traders said.
This week’s inversion within the U.S. Treasury yield curve, which has traditionally preceded several previous U.S. recessions, has stoked recent worries about the economic impact of the Sino-U.S. trade war.
China on Thursday vowed to counter the latest U.S. tariffs on $300 billion of Chinese items. However, U.S. President Donald Trump said any pact must be on America’s terms, suggesting a resolution to the trade war remains elusive.