Investing.com - The dollar edged higher against other major currencies on Friday, amid fresh optimism over the outlook for the U.S. economy and as new policy proposals by U.S. President Donald Trump lent support to the greenback.
The Mexican peso moved lower, with USD/MXN up 0.66% at 21.3612 after Trump suggested the implementation of a 20% tax on Mexican goods to pay for a border wall.
The comments came after the U.S. President on Thursday ordered construction of a U.S.-Mexican border wall and punishment for cities shielding illegal immigrants.
The dollar has been under heavy pressure since Donald Trump’s inauguration last Friday amid concerns over a lack of clarity on his economic policies and fears that his protectionist trade stance could hit corporate profits and act as a drag on growth.
The euro was also lower, with EUR/USD down 0.12% at 1.0665.
Elsewhere, GBP/USD declined 0.44% to trade at 1.2546, off Thursday’s six-week high of 1.2680.
Investors remained cautious as U.K. Prime Minister Theresa May was set to meet with Donald Trump later Friday.
The two leaders were expected to discuss the possibility of a trade deal between their countries.
USD/JPY climbed 0.55% to 115.18, the highest since January 20.
Data earlier showed that Tokyo’s consumer price index rose by an annualized rate of 0.1% in January, beating expectations for a flat reading.
Tokyo’s core CPI, which excludes fresh food, slipped 0.3% this month, compared to expectations for a 0.4% fall.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.20% at 100.72, off the previous session’s seven-week low of 99.77.
Market participants were also looking ahead to U.S. economic growth data, as well as reports on durable goods orders and consumer sentiment, due later in the day.