Investing.com – The dollar held firm versus the yen on Friday after U.S. President Donald Trump indicated a softer approach on Chinese investment in U.S. technology companies.
The White House announced on Wednesday that it would not be looking to impose the new 25% new limits on Chinese ownership in U.S. tech-related companies, as reports had suggested earlier in the week. Instead, the government would rely on the newly strengthened Committee on Foreign Investment in the United States, or CFIUS, to deal with concerns.
The U.S. Dollar Index, which tracks the greenback against a basket of six major currencies, stood at 95.02, up 0.01%. The index rose to as high as 95.534 on Thursday, the highest level since almost a year ago.
The prospects of rising U.S. interest rates were also cited as supporting the dollar.
The yen fell on Friday, with the USD/JPY pair climbed 0.18% to 110.69 as trade tensions between the U.S. and its major trading partners eased somewhat.
Meanwhile, the Chinese yuan, which has dropped each day this week, remained in focus as reports on Friday suggested Chinese officials would step in and attempt to slow the decline in its currency should it fall toward 6.7 per dollar, as breaking through that key psychological level may further worsen sentiment in the already beaten down equity markets. The USD/CNY pair is trading at 6.6192 on Friday, down 0.11%.
"We have Chinese economic data coming up tomorrow, one of the first readings after trade tensions have escalated. Chinese PMIs have been essentially flat for some time but if it shows a major deterioration, that could worsen sentiment," said Kyosuke Suzuki, director of forex at Societe Generale (PA:SOGN).