Many market players are closing existing positions rather than making new bets as they look to reduce risk exposure and the pick up in volatility.
The dollar fell as low as 108.50 yen, nearing its four-month low of 108.28 on Jan. 26. It later edged up to 108.99 yen, but was still down 1.1 percent for the week.
There was limited market reaction after the U.S. Congress missed a deadline to renew funding for the U.S. government to prevent a shutdown.
Missing the midnight deadline technically triggered a shutdown, but it could be brief, with the Senate expected to approve the stop gap bill and budget deal after 1 a.m. (0600 GMT) and send it to the House of Representatives.
• The euro firmed 0.1 percent to $1.2254 but was down 1.6 percent for the week, putting it on track for its largest weekly decline since November 2016.
• Having posted a doji candle yesterday, the dollar index (DXY), which tracks the value of the greenback against major currencies, is trading flat at 90.20 levels in Asia.
Further, the US government on Thursday night slid toward at least a brief shutdown as a single Republican senator, Rand Paul of Kentucky, held up a vote on a far-reaching budget deal that would stave it off, according to New York Times. So far the news has not had a notable impact on the dollar. That said, worsening of risk aversion in the equities due to government shutdown may push the DXY below 90.00.
Dollar Index Technical Levels - A break below 89.90 (previous day's low) would open doors for 89.33 (Feb. 7 low) and 89.00 (psychological level). On the higher side, breach of resistance at90.27 (Feb. 7 high) would expose 90.46 (previous day's
• The U.S. Senate approved a budget deal including a stopgap government funding bill early on Friday, but it was too late to prevent a federal shutdown that was already underway in an embarrassing setback for the Republican-controlled Congress.
House Speaker Paul Ryan expects the chamber to pass the bill despite opposition on both sides of the aisle. The House could vote by roughly 6 a.m., ET, on Friday.
• New York Federal Reserve President William Dudley said on Thursday that as long as the U.S. economy continue to grow at an above trend pace, he would be in favor of another interest rate rise at the U.S. central bank’s upcoming meeting in March.
• Bank of England Deputy Governor Ben Broadbent said on Friday he did not think a couple more interest rate hikes in the space of a year should come as a great shock, but added that the central bank had not fixed any path for tightening.
• China's consumer inflation cooled to 1.5 percent in January, in line with economists' forecasts, official data showed on Friday.
The consumer price index (CPI) had been expected to moderate from a 1.8 percent gain in December.
The producer price index (PPI) rose 4.3 percent from a year earlier, also cooling from the previous month's rise of 4.9 percent, the National Bureau of Statistics (NBS) said on its website.
Sources have told Reuters that China's government will maintain a 3 percent consumer inflation target for 2018, suggesting policymakers are not foreseeing any sharp price rises.
• Oil prices fell for a sixth day on Friday after Iran announced plans to boost production and U.S. crude output hit record highs, adding to concerns about a sharp rise in global supplies.
Brent futures were down 44 cents or 0.7 percent, at $64.37 a barrel by around 0700 GMT. On Thursday, Brent fell 1.1 percent to its lowest close since Dec. 20.
U.S. West Texas Intermediate (WTI) crude was down 62 cents, or 1 percent, at $60.53 a barrel, having settled down 1 percent in the previous session at its lowest close since Jan. 2.
Reference: Reuters, CNBC
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