This week investors will get an update on U.S. inflation figures after the Federal Reserve said it will be patient as it considers whether to continue hiking interest rates.
Other U.S. economic reports due this week include consumer prices on Wednesday, producer prices and December retail sales figures on Thursday and industrial production on Friday. The retail sales report had been delayed by the temporary government shutdown.
Market watchers will also be following progress in U.S.- China trade talks, with meetings between officials from the two sides due to start in Beijing on Monday.
A 90-day trade truce between Washington and Beijing is due to expire on March 1. If the deadline passes without a deal, President Donald Trump has said he could follow through on his threat to increase tariffs on Chinese goods.
Meanwhile, Trump and congressional lawmakers have until Friday to agree on a budget deal to avert another partial shutdown of the federal government.
Trump has said he may declare a national emergency to build a wall along the U.S.-Mexico border if he cannot reach a deal with Democrats.
The dollar edged higher against a basket of currencies on Friday, ending its strongest week in nine months, as traders piled into the greenback in a safe-haven move on worries about a weakening global economy.
Anxieties about the global economy were compounded by comments from Trump indicating he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.13% at 96.41 late Friday. For the week, the index gained 1.17%, its biggest weekly increase since a 1.23% jump in the week of May 13, 2018.
Sterling was marginally lower, with GBP/USD at 1.2942 for its biggest weekly drop since October. Traders expect the pound to remain volatile because of the uncertainty surrounding Brexit.
The euro hovered at a two-week low, with EUR/USD at 1.1328. The single currency still posted its steepest weekly drop against the dollar in over four months in the wake of data that showed an economic slowdown in Europe was spreading.
“The rally that propelled the dollar broadly higher last year has enjoyed renewed life with U.S. growth remaining solid while peers abroad lose momentum,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Reuters contributed to this article