(Nasdaq) The dollar was lower on Friday morning in the North American session as some optimism for the ongoing trade talks with China bolstered trade-linked currencies like the euro and the British pound.
“The belief is that perhaps, even though the numbers in the United States are barely expansionary … the fact that China is slowing down means that there is perhaps economic leverage on the U.S. side and that China will sign on to whatever,” said Juan Perez, senior foreign exchange trader and strategist at Tempus Inc.
On Friday, the Commerce Department reported that U.S. retail sales rebounded in October, but consumers cut back on purchases of big-ticket household items and clothing, raising questions about the consumer strength currently underpinning the U.S. economy.
That may have also contributed to the rise in the euro and the pound.
“When we were looking at second-quarter numbers for Europe and the United Kingdom, those numbers were very worrisome, but that now we’re looking at the third-quarter numbers, their progress has been a little bit better and their pace has been at expectation or beyond, whereas the United States has actually slowed down,” said Perez.
“The dollar is finally today reacting to those numbers and saying the economic pace of the United States is not that great.”