Dollar clings to overnight gains in Asia

The dollar trod water on Friday as a week of mixed messages on the prospect of Sino-US tariff rollbacks left traders on edge and currency markets paralysed, ahead of the release of closely-watched manufacturing data.

"Headline fatigue has set in," said Ray Attrill, National Australia Bank's head of FX strategy.

"With the constant barrage of seemingly contradictory stuff, the market's given up trying to second-guess...seeing is believing, and we'll trade it once we know what's happening."

While the headlines tugged sentiment in all directions, the greenback was steady against the safe-haven Japanese yen at 108.63 yen per dollar, more or less where it began the week.

It was marginally weaker against the euro at $1.1061, flat on the Antipodean dollars and steady against a basket of currencies at 97.958.

Keeping hopes for a breakthrough in trade talks alive were comments from a Chinese commerce ministry spokesman, who said on Thursday that China will try hard to resolve the dispute.

The Wall Street Journal also reported that top US negotiators had been invited to Beijing for a new round of face-to-face talks, seen as a signal of progress.

However, trade experts and people close to the White House told Reuters that negotiations could slide into next year, and there are concerns that US legislation on Hong Kong could sour relations between the parties.

China's yuan, which is highly sensitive to trade news, was stable at 7.0313 per dollar. The British pound was steady at $1.2914, hemmed below $1.30 by the strong dollar and the uncertain outcome of the Dec. 12 election.

"Treading water seems like the appropriate metaphor," ANZ Bank analysts said in a note.

Absent any detailed news on the trade front, the next focus on Friday is on flash purchasing managers index prints due later in the day.

Readings from Germany, the Eurozone, Britain and the United States later on Friday, will offer the latest insight into how the globe's battered manufacturing sector is faring.

"The current narrative has global growth slowing to year end," said Michael McCarthy, chief markets analyst at brokerage CMC Markets in Sydney.

"So the real potential is if we see surprises on the upside...it could have direct impact on Euro-US dollar."