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Yuan hits 5-month highs as trade optimism holds

Investing.com - The U.S. dollar came off highs last week and the Chinese yuan strengthened on Friday morning in Asia.

Optimism has helped shore up stock and currency markets over the past couple of weeks since China and the U.S. agreed to a phase one trade deal that could be signed in early January. U.S. President Donald Trump said on Thursday that there will be a signing and that the deal is “getting done”.

The US Dollar Index was down 0.03% to 97.50 by 8:50 PM ET (01:50 GMT).

The People’s Bank of China set the reference rate of the yuan at 6.9879. On Thursday, the PBOC raised the reference rate, the midpoint around which the currency is allowed to trade, by 0.0266 to 6.9801. The Thursday fix was the highest in about five months.

On Friday, the USD/JPY pair was down 0.16% to 109.45. The yen gained some ground against the greenback even as the government released worse-than-expected retail sales data Friday morning. Retail sales fell 2.1% in November from a year earlier. The actual performance was worse than the 1.7% decline expected by the market, according to Reuters.

The AUD/USD pair was up 0.08% to 06950. The pair was helped to new five-month highs by the optimism surrounding the trade deal between the U.S. and China.

The NZD/USD was down 0.09% to 1.4971.

The GBP/USD 0.03% to 1.2988, with the pound continue to slide as the U.K. moves towards Brexit.

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