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Trade optimism yields dollar's first positive week this year
THE dollar held firm against its rivals on Friday, set for its first weekly gain since mid-December on optimism about talks to end the trade war between China and the United States.
Media reports on Thursday and Friday suggested both countries were considering concessions ahead of a Washington visit from Chinese Vice-Premier Liu He on Jan 30 and 31 for talks aimed at resolving the trade stand-off between the world's two largest economies.
China has offered to go on a six-year buying spree to ramp up imports from the US in order to reconfigure relations between the two countries, Bloomberg reported on Friday, citing people familiar with the matter.
US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs on Chinese goods and suggested offering a tariff rollback during the trade discussions scheduled for Jan 30, the Wall Street Journal reported on Thursday, citing people familiar with the internal deliberations.
Although a Treasury spokesman denied Thursday's report, the positive sentiment was enough to lift the dollar index and the three major US stock indexes Friday morning. Following the publication of the Bloomberg story on Friday, the dollar index added to its gains rising 0.3 per cent, last at 96.352.
Stronger-than-expected US industrial production numbers also helped lift the greenback. American manufacturing output increased by the most in 10 months in December, pushed up by a surge in the production of motor vehicles and a range of other goods, the Federal Reserve said on Friday.
Against a basket of rivals, the dollar was set to rise 0.68 per cent on the week, its first positive week since mid-December. Against the euro, the dollar had strengthened 0.26 per cent to US$1.137, its strongest since Jan 4. REUTERS