Dollar advances

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NEW YORK- The US dollar advanced against major currencies on Friday, while the Canadian dollar weakened and the Mexican peso edged higher after the White House reiterated that President Donald Trump will impose tariffs on Saturday.

Reuters had earlier reported, citing sources familiar with the tariff deliberations, that Trump would announce tariffs on Canadian and Mexican imports on Saturday but delay collection of the duties until March 1 and offer a limited process for certain imports to be exempted.

White House spokesperson Karoline Leavitt denied the report, calling it “false”, adding that tariff duties would be published on Saturday and would take effect immediately.

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Earlier on Friday, US Commerce Department data showed that the Personal Consumption Expenditures (PCE) Price Index rose 0.3 percent last month, the largest increase since last April, amid a surge in consumer spending, suggesting the Federal Reserve would probably be in no hurry to resume cutting interest rates.

“It’s very much tariffs and the administration that’s driving this over-dollar-strength move; one of the biggest challenges is that the stronger dollar has been one trade that has sustained itself if you wanted to put out a theory that there’s a Trump trade out there,” said Marvin Loh, senior global market strategist at State Street in Boston.

“The dollar trade is one of the most over positioned at this point. It does need a catalyst to continue to move up. But the threats and/or actions where we get to see tariffs over the weekend is what’s driving the story now,” Loh said.

The US dollar advanced 0.12 percent against the Canadian dollar rebounding from a slight decline following the Reuters report. The currency is still trading near five-year highs at C$1.451 and notched a weekly gain of nearly 1.1 percent.

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