The US dollar continued to trend higher, posting a weekly gain of 0.55% to 97.9 amid the deepening US-China trade rift. China announced it will impose new tariffs on US$60bil of US imports, from June 1. But trade concerns eased slightly following President Donald Trump’s remark mid-week suggesting the door remained open on a potential US-China trade deal.

Nonetheless, the US dollar was largely buoyed by solid earnings, which led to both the Dow Jones and S&P500 to close higher by 2.1% to 25,863 and 2.3% to 2,876, respectively. Besides, the dollar was partially induced by firmer data release by the end of the week, which includes:

(1) housing starts jumping to 1.235 million in April from 1.139 million in March; and

(2) initially jobless claims falling to 212,000 in the week ending May 11 from 228,000 in the week prior.

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