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  • US Dollar Index looks to post highest weekly close in more than two years.
  • Trump is reportedly considering the option to delist Chinese companies  from stock markets.
  • 10-year United States (US) Treasury bond yield erases Friday’s recovery gains.

The USD/JPY pair advanced to a fresh eright-day high of 108.18 during the early trading hours of the American session on Friday but lost its traction amid a negative shift in the market sentiment. As of writing, the pair was virtually unchanged on the day at 107.85.

Trade headlines remain in spotlight

Heightened hopes of the United States (US) and China coming to terms on trade before escalating the conflict any further made it difficult for the safe-haven JPY to find demand. However, after several news outlets reported that US President Donald Trump’s administration was considering the option of delisting Chinese companies from US stock exchanges caused the market sentiment to turn sour in the US afternoon. Moreover, Trump administration is also reportedly planning to  limit US  investors’ portfolio flows into Chinese companies.

Wall Street’s main indexes, which started the day in the positive territory, turned south with the initial reaction and were now looking to close the day in the red with the Nasdaq Composite erasing 1.3% to lead the losers. Reflecting the risk-averse environment, the 10-year US Treasury bond yield retraced today’s rebound and is now in the negative territory as well.

On the other hand, after the data published by the US Bureau of Economic Analysis today revealed that the core Personal Consumption Expenditure (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, rose to 1.8% on a yearly basis in August and helped the Greenback preserve its strength and limit the pair’s losses. As we approach the end of the week, the US Dollar Index sits comfortably above the 99 handle and remains on track to post its highest weekly close since April 2017.

Technical levels to watch for