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U.S. Dollar Climbs As Trade-war Worries Ease

The U.S. dollar strengthened against its major counterparts in the European session on Thursday, as White House Press Secretary Sarah Sanders suggested Canada, Mexico and other countries may be exempted from forthcoming tariffs on steel and aluminium.

Concerns about the U.S. tariff plan eased after the White House statement that Canada and Mexico, and possibly other countries could be included in carve-outs.

Sanders said the "carve outs" would be made on a "case by case" and "country by country" basis and on national security grounds.

"There are potential carve outs for Canada and Mexico based on national security and possibly other countries as well. That would be a case-by-case and country-by-country basis," Sanders told reporters at the White House.

Yesterday's ADP jobs data and the Fed's Beige Book report painting a positive picture of the world's largest economy also buoyed the currency.

Investors await U.S. jobs data for February due on Friday to assess the strength of the labor market. Economists expect hiring to have picked up to 205,000 in February from 200,000 in the previous month, and the unemployment rate to fall to 4 percent.

The currency held steady against its major rivals in the Asian session.

The greenback advanced to a weekly high of 0.9456 against the franc, compared to 0.9435 hit late New York Wednesday. The greenback is seen finding resistance around the 0.97 region.

Data from the State Secretariat for Economic Affairs showed that Switzerland's unemployment rate decreased slightly in February.

The jobless rate dropped to a seasonally adjusted 2.9 percent in February from 3 percent in January.

The greenback that closed yesterday's trading at 1.2411 against the euro climbed to a 2-day high of 1.2375. On the upside, 1.22 is seen as the next resistance level for the greenback.

Figures from Destatis showed that Germany's factory orders declined more than expected in January.

New orders in manufacturing dropped 3.9 percent month-on-month in January, reversing a revised 3 percent rise in December. Orders were forecast fall moderately by 1.8 percent.

The greenback reversed from an early low of 1.3910 against the pound, rising to 1.3860. If the greenback rises further, 1.35 is likely seen as its next resistance level.

Survey data from the Royal Institution of Chartered Surveyors showed that UK house prices stabilized in February and property coming to the market for sale declined.

The net house price balance fell to zero in February.

The greenback bounced off to 106.13 against the yen, from a low of 105.89 hit at 2:45 am ET. The greenback is poised to find resistance around the 110.00 level.

Data from the Cabinet Office showed that Japan's gross domestic product rose a seasonally adjusted 0.4 percent on quarter in the fourth quarter of 2017.

That exceeded expectations for an increase of 0.2 percent after last month's preliminary reading suggested a gain of 0.1 percent.

The greenback recovered to 0.7255 against the kiwi, 1.2937 against the loonie and 0.7795 against the aussie, from its early low of 0.7298, 2-day lows of 1.2867 and 0.7839, respectively. The greenback is seen finding resistance around 0.70 against the kiwi, 1.32 against the loonie and 0.76 against the aussie.

Looking ahead, the European Central Bank will announce interest rate decision at 7:45 am ET. The ECB is expected to hold its main refi rate at a record low zero percent and the deposit rate at -0.40 percent.

Canada housing starts for February, building permits and new housing price index for January, as well as U.S. weekly jobless claims for the week ended March 3 are due in the New York session.

At 11:00 am ET, the Bank of Canada Governor Stephen Poloz speaks at the unveil of the new $10 bank note, in Halifax.

At 3:35 pm ET, the BOC Deputy Governor Timothy Lane speaks about the March interest rate decision at the Vancouver Board of Trade.

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