Dollar Near 1 Percent Weekly Declines as Traders Eye NFP

USDThe U.S. dollar remains down nearly 1 percent for the week, despite positive data out on Thursday which showed that the U.S. trade deficit fell to a 1 ½ year low in October and that trade could boost economic growth in the fourth quarter of 2019. The Commerce Department announced that the U.S. trade deficit in October was $47.2 billion, down 7.6 percent, due to a decline in both imports and exports of goods. This was the second consecutive monthly decline in the trade bill.

The goods deficit with China fell 1.1 percent to $31.3 billion. Imports from China remained stable, but exports increased 3.4 percent. The trade gap between the United States and the European Union soared 20 percent to $16.4 billion thanks to record high imports from the EU.

Despite this data, the decline in imports suggested to some analysts that an economic contraction is coming. Additionally, manufacturing activity contracted for the fourth consecutive month in November, and there was also a marked slowdown in the construction industry and the services sector, data which negated the positive impacts of the low trade deficit and kept traders away from the U.S. dollar.

The dollar index was down 0.03 percent as of 1:39 p.m. HK/SIN on Friday, trading at 97.38. The index declined every day this week. The greenback eased 0.09 percent against the Japanese yen, trading at 108.66. The safe-haven yen has been a popular choice for traders who are looking for stability in the times of uncertainty as the U.S.-Sino trade war continues to simmer and the U.S. economy sends mixed signals. U.S. President Trump continues to send positive signals about the process of the trade talks between Washington and Beijing, but the optimism has not been shared by China, keeping optimism subdued and traders on edge. The euro was up 0.03 percent against the dollar to $1.1105, while the British pound gained 0.02 percent to $1.3157.

Traders are now looking towards the non-farm payroll report which will be released later on Friday as an indicator of the strength of the U.S. economy. A Reuters poll predicted the addition of 180,000 jobs in November. A deviation by 30,000 jobs in either direction could cause a swift reaction in the markets.

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