Currencies: Dollar traders take a breath before jobs report

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Major currency pairs were struggling for direction in early Friday trading, ahead of a data-heavy morning in the U.S., where traders are waiting for the November jobs report.

Currencies retraced some of their moves from Thursday, which had come on renewed worries about U.S.-China relations. Meng Wanzho, the chief financial officer of Chinese telecommunications business Huawei and daughter of the company’s founder, was arrested in Canada at the request of Washington, sparking an outcry from Chinese officials. Market participants took the developments to be detrimental to a trade deal being reached between the world’s two largest economies.

Read: Emerging markets assets sell off over Huawei and global growth worries

The ICE U.S. Dollar Index

DXY, +0.09%

 was up 0.1% at 96.886.

The November jobs report is due at 8:30 a.m. Eastern, followed by November consumer sentiment and October wholesale inventories at 10 a.m.

Don’t miss: Why currency experts expect the dollar to struggle in 2019

Similarly, the euro

EURUSD, -0.0879%

, the greenback’s major rival and biggest component of the dollar gauge, was slightly lower, fetching $1.1371, versus $1.1379 late Thursday. A revised reading of third-quarter eurozone gross domestic product put it at an annual rate of 1.6%, just below the previous reading of 1.7%.

“Despite being medium-term euro bearish, we admit that a fair amount of ‘bad news’ is already baked into the euro,” said Stephen Gallo, European head of FX strategy. “The growth numbers put the European Central Bank in an awkward position though, and we are starting to come to the conclusion that next week’s ECB decision will be composed of one of two likely options: 1) announce an end to outright purchases alongside a new support program or 2) extend outright purchases by three months.”

The British pound

GBPUSD, -0.1486%

 was marginally weaker at $1.2762, compared with $1.2782 late Thursday, ahead of a crucial Brexit vote next week. On Tuesday, the British Parliament is due to decide whether the deal Prime Minister Theresa May agreed with the European Union will go through.

Traditional haven currencies like the Japanese yen

USDJPY, +0.20%

 and Swiss franc

USDCHF, +0.1209%

 also retraced Thursday’s moves, when both rose to multiweek highs versus the dollar as risk appetite came off. The buck last bought ¥112.84, up 0.2%, and 0.9933 franc, up 0.1%.

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Anneken Tappe is a markets reporter for MarketWatch. She is based in New York.

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