The dollar edged down on Friday but was still on track for weekly gains against its major counterparts, as investors focused on the two-day Group of 20 nations’ currency and economic talks that kicked off in Shanghai.
The dollar index, which tracks the greenback against a basket of six rival currencies, was down about 0.2 per cent at 97.129, but up about 0.6 per cent for the week.
The dollar slipped about 0.2 per cent to 112.83 yen after earlier rising as high as 113.22, more than two yen above this week’s trough of 111.04 yen. It was up about 0.2 per cent for the week.
“Exporters sold the dollar, but no one took it too far with the G20 going on now,’’ said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.
Wall Street rally
An overnight recovery in oil prices helped spur a rally on Wall Street, which helped sap demand for perceived safe-haven currencies like the yen.
Crude oil futures edged down in Asian trading on Friday, but jumped 3 per cent in the previous session after confirmation of a meeting of major producers held out the hope of an output freeze to address a global glut.
Against the Japanese currency, the euro was back above 124.00 yen at 124.87, up 0.3 per cent and well off a three-year low of 122.465 set on Wednesday. But it was still down about 0.3 per cent for the week.
The Australian dollar edged down slightly to 81.65 yen, up about 1.4 per cent for the week, having bounced off this week’s low of 79.60.
G20 meet
China is a main focus of the G20 meeting, in light of recent global concerns about its waning growth momentum, yuan currency policies and overall market stability.
Chinese policymakers told global financial leaders on Friday the world’s second-largest economy remains on a sound footing, while also seeking to manage expectations around the pace of economic reforms in the country.
With recent market turbulence in mind, investors are mostly looking for reassurance from G20 finance ministers and central bankers.
“Overall, a constructive message from the G20 could support an already ongoing recovery in risk sentiment, but ultimately the ability of global growth data to improve will be more important,’’ analysts at BNP Paribas wrote in a note to clients.
US durable goods orders
US data on Thursday were generally positive, with durable goods orders rising by the most in 10 months in January. New applications for unemployment benefits continued to point to a tightening labour market.
The euro rose 0.4 per cent to $1.1066, following a two-week slide from a 3-1/2 month high of $1.1377. But it was still down about 0.6 per cent for the week.
ECB inflation target
In Europe, inflation remained almost non-existent in January with consumer prices growing a mere 0.3 per cent year-on-year. That was below an earlier estimate of 0.4 per cent and well under the European Central Bank’s (ECB) target of close to 2 per cent.
The latest figures only cemented the market's view that the ECB will have to add more stimulus soon, likely in March.