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FOREX-Dollar edges up from 5-week low vs yen, markets brush off China trade data

Published 13/01/2017, 03:57 pm
© Reuters.  FOREX-Dollar edges up from 5-week low vs yen, markets brush off China trade data
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* Dollar recovers from a 5-week low vs yen

* Dollar index above the lowest level since Dec. 8

* China trade data softer than expected

* U.S. retail sales data due later in the day

By Yuzuha Oka

TOKYO, Jan 13 (Reuters) - The dollar inched up from a five-week low against the yen and steadied against the broader basket of currencies on Friday, while the markets brushed off softer-than-expected Chinese exports figures.

The dollar last stood at 115.04 yen JPY=EBS , up about 0.3 percent from late U.S. levels after having tumbled to a five-week low of 113.75 yen on Thursday in wake of disappointment at President-elect Donald Trump's failure to elaborate on fiscal stimulus plans during a news conference a day earlier.

On the week, the dollar has lost 1.6 percent so far - its fourth straight week in the red, which would mark its biggest weekly fall since late July if the losses are sustained.

The dollar index, which measures the greenback against a basket of six major peers, stood at 101.54 after having fallen to 100.72 .DXY on Thursday, its lowest level since Dec. 8.

Some analysts think the dollar could regain an upper hand as soon as more details of Trump's stimulus become clear.

"It is unlikely that the yen strengthens further against the dollar," Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo. "The U.S. Treasuries yield is expected to rise considering rising U.S. inflation expectations."

With U.S. markets closed for a holiday traders were unlikely to open fresh positions ahead of the long weekend, though U.S. data to be released later in the global day could give the dollar a final jolt for the week. Producer price data is also due for release. dollar can be sold further if December retail sales are worse than expected," said Kumiko Ishikawa, FX market analyst at Sony Financial Holdings.

A Reuters poll forecast 0.7 percent growth in retail sales in December, following 0.1 percent growth in November. week's U.S. jobs data showed wages rose at the fastest pace since June 2009, fuelling expectations that Trump's expected fiscal spending and tax cuts could boost U.S. inflation. euro traded at $1.0607 EUR=EBS , having hit a two-week high of $1.0684 on Thursday.

Currencies showed muted reaction to data showing China's December dollar-denominated exports were down 6.1 percent, while imports were up 3.1 percent. trade surplus of the world's second largest economy unexpectedly shrank to $40.818 billion in December from November's $44.61 billion.

Still, with Trump threatening to label China a currency manipulator, the country's trade surplus is likely to be closely watched in the future.

The yuan was little changed, with its offshore unit trading at 6.858 per dollar CNH=D4 .

The Mexican peso, a major victim of Trump's protectionist rhetoric, licked wounds after hitting a record low on Wednesday, hit by worries of deep economic slowdown as Trump has said U.S. auto companies would face a high tax for products made south of the border.

The peso stood at 21.8080 peso to the dollar MXN=D2 , having broken the 22 peso-per-dollar mark for the first time on Wednesday. (Editing by Simon Cameron-Moore)

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