Dollar hits three-week high vs yen on trade optimism; US jobs report

The greenback has gained about 0.85 percent against its safe-haven Japanese peer this week, thanks also to factors such as strong U.S. economic data and broad improvement in risk appetite.

The trade war between the world’s two biggest economies has been a major distraction for financial markets over the past year, with riskier assets in particular taking a hit on worries about the broadening business and growth impact of the conflict.

U.S. President Donald Trump said on Thursday both countries were getting very close to a trade deal that could be announced within four weeks.

On the economic front, investors will have an opportunity to gauge the health of the world’s largest economy when the March U.S. jobs report is released at 1230 GMT.

“In particular focus is how strong the earnings component of the jobs report turns out to be. A strong wages outcome would underline robust private consumption and hasten the rebound in Treasury yields and in turn allow dollar/yen to test fresh highs,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

The dollar extended overnight gains and rose to 111.80 yen, its highest since March 15.

The euro was steady at $1.1223, capped firmly after data released on Thursday showed German industrial order dropped in February.

The pound was nearly flat at $1.3074 after shedding 0.7 percent overnight.

Sterling slipped on Thursday, snapping a three-day rising streak, as concerns rose that Britain may be headed for a protracted Brexitdelay.

Britain could ask the European Union for a long Brexit delay next week if crisis talks between Prime Minister Theresa May’sgovernment and the opposition Labour Party fail to find a way out of the impasse over the divorce from the European Union.

The dollar index against a basket of six major currencies was unchanged at 97.300 after rising 0.2 percent the previous day.

The Australian dollar was a touch higher at $0.7120.

The currency has risen about 0.3 percent this week, supported as signs of progress in the U.S.-China trade dispute lifted risk assets and commodity prices.