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·       The dollar fell versus its major peers on Friday, as investors grew increasingly confident that the U.S. Federal Reserve may hit the pause button on monetary tightening this year.

“The market has almost priced in that the Fed will not be hiking rates any further. To get the dollar weaker, market now has to expect a rate cut...I don’t see that happening,” said Sim Moh Siong, currency strategist at Bank of Singapore.

Sentiment was still slightly cautious in Asian trade on a lack of concrete details from the United States and China on any progress in their trade dispute after a three-day meeting in Beijing. The two sides are more than halfway through a 90-day truce agreed by U.S. President Donald Trump and his Chinese counterpart Xi Jinping.

Traders still remain optimistic that a trade deal between the world’s largest economies will eventually materialize. U.S. Treasury Secretary Steven Mnuchin said late on Thursday that Chinese Vice Premier Liu He will “most likely” visit Washington later in January for trade talks.

The dollar also fell 0.47 percent versus the offshore yuan to 6.7602. The yuan is now at its strongest since late July last year.

The dollar index fell by 0.17 percent to 95.37. The index has fallen around 2.2 percent since mid-December on expectations that a slowdown in growth, both in the United States as well as globally, will restrict the Fed from raising rates in 2019.

·       The euro <EUR=> gained 0.2 percent to $1.1519, after losing 0.4 percent of its value in the previous session. The single currency has been pressured by a slew of weaker-than-expected economic data, especially from France and Germany.

The European Central Bank is widely expected to remain accommodative in 2019, which should keep a lid on the single currency.

·       Elsewhere, sterling traded marginally firmer, fetching $1.2752 in early Asian trade with traders focused on the progress of Brexit.

British Prime Minister Theresa May must win a vote in parliament to get her Brexit deal approved or risk seeing Britain’s exit from the European Union descend into chaos. The vote is now due to take place on Jan. 15. The numbers are not in May’s favor and her chances of winning the vote look extremely slim.

·       The abrupt departure of World Bank President Jim Yong Kim could revive long-standing concerns about the degree of influence the U.S. wields in selecting a new leader for the international financial institution.

The world's largest economy has always chosen World Bank leaders and if President Donald Trump appoints one who shares his views, experts say the organization's reputation and climate change program could be at stake.

·       VP Bank's Felix Brill said investors should expect more market volatility due to the ongoing U.S.-China trade war negotiations.

In fact, he said, the Chinese economy is a bigger cause for concern at the moment than the U.S. economy.

Still, he ultimately expressed optimism that China's leaders will keep their economy together.

·       China plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand.

The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, according to four sources with knowledge of the meeting’s outcome.

·       Beijing’s efforts to prop up a slowing Chinese economy, in the middle of an ongoing trade war with Washington, is pushing the government to introduce previously untested policies, according to a senior analyst at Moody’s Investors Service.

While official data have indicated that China’s economy held up for much of last year, cracks have started appearing in recent months as production metrics and export orders fell.

“We see growth in China slowing to 6 percent,” Christian Fang, an assistant vice president-analyst at Moody’s, told CNBC’s “Squawk Box ” on Thursday. “I think the bigger issue for us is that policy trade-offs have increased in China. On the one hand, there is this broader campaign of de-risking, deleveraging, but policy also seems to be shifting slightly towards growth — supporting growth.”

“Some of the tools in the policy response they have meted out are untested,” he added. “Tax cuts, for instance, we don’t know what the businesses and the consumers — how they would respond to the tax cuts.”

·       The ongoing trade war between Washington and Beijing is weighing on Chinese toy exporters.

Even though their products have yet to take a direct tariff hit, exhibitors at the Hong Kong Toys & Games Fair said the tariff battle and heightened tensions are still impacting their business.

They cited uncertainty, the impact of tariffs already placed on some electronics that go into increasingly sophisticated toys and supply chain headaches as U.S. and Chinese negotiators work to forge a deal before a mutually-agreed-upon reprieve on new levies ends in March.

·       North Korean leader Kim Jong Un's three-day meeting with Chinese President Xi Jinping in Beijing this week likely focused on a range of issues including economic ties, nuclear talks and the possibility of a second summit between Kim and U.S. President Donald Trump.

North Korea is hungry for foreign investments, particularly in infrastructure, as its government focuses on economic development.

It "would love to be part of Belt and Road," said Dane Chamorro of consulting firm Control Risks.

While China may be open to the idea, experts say it's unlikely to offer the isolated state membership anytime soon.

·       Canada is working with politicians and businesses in the United States to pressure President Donald Trump to scrap tariffs on its steel and aluminum, Prime Minister Justin Trudeau said on Thursday.

·       France’s response to “yellow vest” protests could be a turning point for euro zone bond markets if it kicks off an era of increased public borrowing in the bloc and loads additional debt on to a market already nervous over the removal of ECB stimulus.

Increased public spending could be the way out for governments struggling to contain discontent over living standards and may face a strong challenge from populist politicians at May’s European parliament elections.

But if that pushes up government bond supply, it may also increase concern about some member states’ longer-term ability to service debt, and could hamstring the European Central Bank’s plan to lift interest rates.

·       Oil slipped on Friday amid concerns over the outlook for the global economy, but output cuts agreed by major exporters underpinned crude prices and kept markets on track for a strong weekly climb.

International Brent crude futures were at $61.55 per barrel at 0333 GMT, down 13 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures dropped 7 cents, or 0.1 percent, to $52.52 per barrel.

Traders said the declines came on lingering concerns over the health of the global economy.

“If we experience an economic slowdown, crude will underperform due to its correlation to growth,” said Hue Frame, portfolio manager at Frame Funds in Sydney.

Most analysts have downgraded their global economic growth forecasts below 3 percent for 2019, with some even fearing a looming recession amid trade disputes and spiralling debt.