- G7 meeting prelude to week filled with event risks
- Dollar set for weekly loss
- GRAPHIC-World FX rates in 2018: http://tmsnrt.rs/2egbfVh
(Adds comment, updates prices in text, table)
The dollar rose on Friday after a four-day losing streak, while the safe-haven yen gained as investors grew cautious over what was expected to be a contentious G7 meeting in Canada on Friday.
Despite Friday's gains, the dollar posted its largest weekly drop since late March.
Next week's expected hike in U.S. interest rates by the Federal Reserve, a European Central Bank policy meeting and a Brexit bill vote all pose risks for currency traders and could inject more volatility in the market. (For a factbox, see
) "America's isolation on trade policy, which will be on fullshow at this weekend's G7 summit in Canada, raises the admittedly still small risks of a worst-case scenario in which the U.S. tears up NAFTA (North American Free Trade Agreement) or launches an all-out trade war with China," said Michael Pearce, senior U.S. chief economist, at Capital Economics.
Top U.S. allies scrambled on Friday to keep a Group of Seven nations summit from veering off track as President Donald Trump vowed to deal with "unfair trade practices" by Canada and the European Union.
In late trading, the dollar rose 0.2 percent against a basket of currencies .DXY to 93.56. But it fell 0.7 percent for the week, its steepest weekly fall in 10 weeks.
Trade disputes between the United States and its major partners will be in the spotlight, with specific focus on the Mexican peso MXN= and the Canadian dollar CAD=D3 .
High-yielding currencies were a sea of red, meanwhile, with the yen higher on the day. The dollar was last down 0.2 percent versus the yen at 109.45 JPY=
ECB BETS The dollar has come under pressure this week as the euro bounced back from 10-month lows amid easing Italian political concerns, and speculation the ECB could signal intentions to start unwinding its massive bond purchasing program when it holds its policy meeting on June 14.
The euro fell 0.3 percent to $1.1766 EUR= after rising to a three-week high of $1.1840 overnight as investors took profits into this week's bounce. It was up 0.9 percent on the week, its biggest weekly gain since mid-February.
While expectations have grown the ECB will signal its intention to wind down its quantitative easing program, ING believes the Italian political situation and the potential of a breakout in trade tensions will keep the central bank from taking action.
The Federal Reserve, meanwhile, is widely expected to raise rates next week. Investors will most likely focus more on clues about interest rate rises for the rest of the year.
======================================================== Currency bid prices at 3:33PM (1933 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1766 $1.1797 -0.26% -1.92% +1.1810 +1.1728 Dollar/Yen JPY= 109.4600 109.6900 -0.21% -2.85% +109.8500 +109.2000 Euro/Yen EURJPY= 128.79 129.41 -0.48% -4.73% +129.7200 +128.1200 Dollar/Swiss CHF= 0.9852 0.9804 +0.49% +1.12% +0.9887 +0.9799 Sterling/Dollar GBP= 1.3408 1.3420 -0.09% -0.77% +1.3438 +1.3355 Dollar/Canadian CAD= 1.2932 1.2970 -0.29% +2.82% +1.3040 +1.2930 Australian/Doll AUD= 0.7598 0.7625 -0.35% -2.60% +0.7627 +0.7561 arEuro/Swiss EURCHF= 1.1596 1.1566 +0.26% -0.80% +1.1618 +1.1538 Euro/Sterling EURGBP= 0.8771 0.8788 -0.19% -1.26% +0.8799 +0.8758 NZ NZD= 0.7035 0.7026 +0.13% -0.72% +0.7042 +0.7009 Dollar/DollarDollar/Norway NOK= 8.0547 8.0558 -0.01% -1.86% +8.1104 +8.0448 Euro/Norway EURNOK= 9.4795 9.5046 -0.26% -3.75% +9.5310 +9.4707 Dollar/Sweden SEK= 8.7100 8.6978 -0.05% +6.20% +8.7739 +8.6939 Euro/Sweden EURSEK= 10.2518 10.2607 -0.05% +4.19% +10.3113 +10.2460 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ EURUSD, yields and correlation http//reut.rs/2LpyiJh^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
