US dollar is on pace for its strongest weekly gain since Septemeber 2018

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February 8, 2019 1:35pm NYSE:UUP

US Dollar

From Anneken Tappe: The U.S. dollar on Friday took aim at its strongest weekly gain since September while most major currency pairs traded in tight ranges.

The ICE U.S. Dollar Index DXY, +0.04%  was on track for a 1% increase for the week, its first since the week ended Jan. 18, and would mark the buck’s most assertive weekly percentage gain since late September, according to FactSet data. On the day, however, the gauge was little changed at 96.529.

With U.S.-China trade talks serving as a sword of Damocles hanging over the market, investors were attuned to fresh tariff developments, including President Donald Trump’s confirmation that he wouldn’t meet Chinese President Xi Jinping before a March 1 trade deadline.

CNBC, however, reported that tariffs on Chinese goods were likely to stay at 10% on March 1 in the absence of an agreement rather than rise to 25%, as scheduled.

“Against a backdrop of slowing growth and lower forecasts it’s certainly unwelcome that President’s Trump and Xi won’t be meeting in the next couple of weeks, however it doesn’t mean that we won’t see another tariff suspension in order for talks to continue, and that might be something that investors might be able to hang their hats on when China returns from its Lunar New Year holiday,” said Michael Hewson, chief market analyst at CMC Markets UK, in a Friday research note.

Canada’s jobs report showed 66,800 jobs were created in January, overshooting the FactSet consensus estimate of just 5,000 and leading the Canadian dollarUSDCAD, -0.3156%  to rally. Canadian unemployment, however, rose to 5.8%, compared with 5.7% expected. Before the data, the U.S. dollar was slightly stronger versus its Northern neighbor, before sliding to a session low of C$1.3233. The greenback last bought C$1.3262, compared with C$1.3309.

In Europe, German trade data showed an increase in both imports and exports in December. The figures also beat consensus estimates. Germany’s imports rose 1.2%, while exports grew 1.5%. The trade surplus rose to ?19.4 billion ($22 billion).

The euro EURUSD, -0.1323%  was little changed at $1.1343.

Similarly, the British pound GBPUSD, -0.1698%  was little changed at $1.2953. Prime Minister Theresa May on Friday was traveling to Ireland in an effort to secure changes to her Brexit deal.

The Invesco DB US Dollar Index Bullish Fund (UUP) was trading at $25.69 per share on Friday afternoon, down $0.00 (0.00%). Year-to-date, UUP has gained 6.91%, versus a 1.19% rise in the benchmark S&P 500 index during the same period.

UUP currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 17 ETFs in the Currency ETFs category.

This article is brought to you courtesy of MarketWatch.

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