U.S. Dollar steady after strong data; Hong Kong and Brexit remain in focus

On Friday, the dollar changed little in Asia after the release of strong economic data earlier this week.

The U.S. Dollar Index traded at 98.250 by 04:45 GMT down 0.04%.

The U.S. data showed that the country grew at a 2.1% annualized rate, compared to 1.9% in the first reading. 

The data contradicts other indicators that the global economy is slowing down.

On Friday, the dollar was stable at 109.51 Japanese yen. If it holds, it will post a 0.7% gain for the week and hit its highest weekly close since May 31. 

Overnight trade was light with U.S. desks closed for Thanksgiving.

In another report, durable goods gained 0.6% after dropping 1.4% in the previous month.

This week's the dollar drew its strength on hopes that China and the U.S. were in the process of reaching a trade deal and the strong economic data.

The Fed also flagged a promising outlook amid signs of the labor market, prompting a pullback on rate cuts bets for this year and next. The markets are now pricing in a 5% chance the Fed will hike rates next month and mostly expecting it to hold steady.

The U.S. equities and bond markets were closed on Thursday for the Thanksgiving Holiday.

Concerns over Hong Kong and Brexit remain in focus

The US-China trade progress remained a focal point after the U.S. President Donald Trump signed two bills into law to back Hong Kong's anti-government protesters.

China has vowed to retaliate but has not taken any action so far. It's unclear if it would have any bearing on the trade talks.

America intends to implement another batch of tariffs on Chinese goods on Ded. 15.

The GBP/USD pair was near flat at 1.2915 as opinion polls ahead of the Dec. 12 election firmed the Conservative Party.

The GBP has been the week's other main beneficiary, adding half a percentage point as the opinion polls confirmed Boris's lead in the election.

On Friday, the pound was steady at $1.2910. The euro held at $1.1012.

"The market has come to the view that this is Johnson's election to lose now," said Chris Weston, with expectations he can win with a large margin.

Chris is the head of research at Melbourne brokerage Pepperstone. 

"That said, should any polls call this margin into question, where invariably there will be one or two, then GBP could see a sharp sell-off, although I would be using that weakness to buy," he added

The EUR/USD pair rose 0.1% to 1.1011.

The USD/JPY pair dropped 0.1% at 109.45 as the dropping Chinese and Hong Kong stocks sent the safe-haven yen slightly higher.

The AUD/USD pair and the NZD/USD pair gained 0.1% and 0.4%, respectively.

The strong USD has the Australian dollar slightly weaker for the week, but steady on Friday ahead of Tuesday's central bank meeting. The market has priced an 11% chance of a cut in interest rates to a record low 0.5%.

It last traded at $0.6767, not far above a six-week low hit on Thursday.

The New Zealand dollar was flat on Friday at $0.6418 and held its ground for the week, buoyed by rebounding business sentiment.

China's yuan was steady at 7.0287 per dollar in foreign trade.