Written by Tom Westbrook
SINGAPORE (REUTERS) – Buoyed by a dovish European Central Bank and strong U.S. indicators, especially boosting expectations of how quickly U.S. interest rates could fall if Donald Trump wins the presidential election. , the dollar on Friday was heading for its third straight weekly gain. Presidency.
In Asia, market reaction to a range of economic data from China, including its third-quarter growth rate, was muted, but subsequent comments by the country's central bank detailing the Chinese government's stimulus plan It helped boost wealth broadly.
The Australian dollar, which is often used as a proxy for China's yuan liquidity, was last up 0.2% at $0.6708, extending its gains slightly from early trading.
The onshore yuan rose 0.06% to 7.1199 yuan per dollar, while the offshore yuan rose 0.12% to 7.1282 yuan.
The People's Bank of China (PBOC) formally launched the Securities, Funds and Insurance Swap Facility (SFISF) on Friday, as policymakers signaled the possibility of further monetary easing alongside other supportive measures. As a result, the currency's appreciation became even more pronounced. China's economy is in decline.
These came on the heels of Friday's big data release showing that China's third-quarter growth was slightly better than expected, but real estate investment fell more than 10% in the first nine months of this year. Retail sales and industrial production recovered in September.
“Given that nominal GDP itself is also stable, things are actually not bad overall. I think the pace of growth is similar to what we saw in the second quarter. We are taking it well,” Ho Woei said. Mr. Chen is an economist at UOB.
“The focus is really on what the government does next in terms of the size of its fiscal stimulus.”
Elsewhere, the euro has fallen about 1% so far this week, below its 200-day moving average, and hovers near a 2-1/2-month low in Asian trade at $1.0837.
On a rolling basis, the dollar's 3.1% rise against the euro over the three-week period was the sharpest rise since mid-2022, and the first time the dollar rose to the 150 yen level since early August.
The US dollar pared some of these gains and last bought 149.93 yen on Friday.
Data on Thursday showed U.S. retail sales growth beat expectations, prompting the ECB to cut interest rates by 25 basis points.
Four sources told Reuters the ECB is likely to cut rates further in December unless economic data suggests otherwise.
Meanwhile, markets were disappointed by Chinese authorities' lack of details on plans to revive the slowing economy, with the yuan heading for its steepest weekly decline against the resilient dollar in more than 13 months. [CNY/]
“All of these things are contributing to the dollar's strength,” said Jason Wong, senior strategist at BNZ in Wellington.
He said the dollar was tracking Trump's new lead in election prediction markets as his tariff and tax policies were seen as likely to keep U.S. interest rates high. There's also Trump trading going on.”
The New Zealand dollar is similarly on track to fall by 0.75% for the week, and was little changed at $0.6063 in Asian trading.
President Trump's outlook is also a factor in Bitcoin's rise, as the Trump administration is seen as taking a relaxed stance on cryptocurrency regulation. The most recent price was $67,867.11, an increase of over 10% since October 10th. America heads to the polls on November 5th.
In the geopolitical arena, Israel announced that it had killed Hamas leader Yahya Sinwar, the mastermind of the October 7, 2023 attack that sparked the war, in the Gaza Strip.
Israel's shekel rose on the news, hitting a two-week high, but Israeli Prime Minister Benjamin Netanyahu said the fighting would continue and the broader market did not react immediately.
Sterling recovered to the $1.30 level overnight and rose above that level on Friday, but concerns that the Bank of England may cut interest rates twice by the end of the year after British inflation fell more than expected. The outlook is on the rise, with the stock trending downward for the week. . [GBP/]
British retail sales figures and US housing starts will be released later on Friday, as well as Japan's largest trade union organization Rengo's wage bargaining plans for this year. Data showed Japan's core consumer prices rose 2.4% year-on-year in September, slightly higher than expected.
The U.S. dollar index hit a 2-1/2-month high of 103.87 on Thursday and is up nearly 0.8% on the week so far.
(Reporting by Tom Westbrook; Editing by Jamie Freed and Kim Coghill)
