The U.S. dollar pulled back from recent gains on Friday, looking to end the week little changed compared with last Friday as unknowns around these familiar factors paralyzed trading: the government shutdown, U.S.-China trade talks and the Federal Reserve meeting next week.

The ICE U.S. Dollar Index

DXY, -0.68%

was down 0.6% at 96.033. For the week, the gauge was on track for a modest 0.3% drop.

Dollar rivals reaped the benefits of its slide, and the euro

EURUSD, +0.8048%

 climbed to $1.1383, from $1.1307. The European Central Bank on Thursday acknowledged downside risks in the eurozone economy, while Germany — the biggest economy of the bloc — reportedly downgraded its 2019 gross domestic product growth outlook to 1% from 1.8% in the fall.

The greenback also reversed its move versus the Japanese yen

USDJPY, +0.00%

 , against which it started the session stronger. One dollar last bought ¥109.61, little changed in negative territory, compared with its session high of ¥109.95.

Meanwhile, the British pound

GBPUSD, +0.6582%

 clawed back some of its earlier gains, trading at $1.3133, compared with $1.3065 late Thursday.

Earlier strength in sterling followed a report that Northern Ireland’s Democratic Unionist Party agreed to back Prime Minister Theresa May’s alternative Brexit deal, which Parliament will vote on Tuesday. The DUP is negotiating with May’s government over putting a time limit on the so-called Irish backstop, which basically guarantees no customs checks between EU member Ireland and Northern Ireland after Brexit kicks in, according to U.K. newspaper The Sun.

On the week, the pound was the best performer among G-10 currencies, climbing 2%, according to FactSet, and underlining that market expectations for the final Brexit result have moved away from the worst-case hard Brexit scenario.

Elsewhere, China’s central bank said it would inject an additional 250 billion yuan ($37 billion) into its banks in response to changes of bank’s targeted reserve requirement ratios, which were last cut earlier this month, according to a Reuters report. The People’s Bank of China also created a bond swap facility that allows to swap commercial bank perpetual debt for central bank bills. The initiative is set to counteract the risk of a trade war with the U.S., as well as its domestic economic slowdown.

China’s yuan was stronger against the U.S. dollar on Friday, with the buck buying 6.7506

USDCNY, -0.6025%

 in Beijing, down 0.6%, and 6.7578 yuan

USDCNH, -0.5960%

 in the offshore market, also down 0.6%.

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2019-01-25