LONDON : The dollar edged lower on Friday as pro-growth currencies gained following a rise in the Chinese yuan to a one-week high on news that U.S. President Joe Biden and Chinese leader Xi Jinping spoke for the first time in seven months.
In a statement, the White House said Biden and Xi had “a broad, strategic discussion”, including areas where interests and values converge and diverge. The conversation focused on economic issues, climate change and COVID-19, a senior U.S. official told reporters.
The yuan gained 0.2per cent on the dollar after the news, moving away from the key 6.50 yuan per dollar level to 6.4364 – its highest since Sept. 3.
“We have seen USD/CNH go offered on the news and any surprise improvement/reset in U.S.-China relations could see USD/CNY move further away from the key 6.50 threshold,” said ING strategists in a morning note to clients.
“Such a move is typically positive for pro-cyclical FX and slightly negative for the…