Dollar dips in Asia

The dollar stepped back from 13-1/2-month highs against other major currencies on Friday as talks next week between China and the United States offered some hope that the world's two largest economies will find a way to head off a full-blown trade war. The dollar index, a measure of the greenback's strength against a basket of six major peers, was 0.1 percent lower at 96.549.
It had climbed to 96.984, its highest since late June 2017 on Wednesday during a week in which a plunge by the Turkish lira and concerns over China's economic health hit emerging market currencies, driving up demand for the safe-haven greenback. The dollar lost steam, however, after China and the United States agreed on Thursday to hold a new round of trade talks on August 21-22, helping stem risk aversion in the broader markets.
The euro, which had also been hit by fears of a spillover from Turkey's financial crisis, was among the currencies to benefit from the news of trade talks. The euro was a shade firmer at $1.1380, after gaining 0.3 percent overnight. The single currency was down 0.25 percent this week, having brushed a 13-month low of $1.1301 in the wake of concerns that the Turkish crisis could hurt European banks.
"Considering that European banks' exposure to Turkey is relatively limited, this week's reaction by the euro looked overdone. But the rise in Italian bond yields amid the country's fiscal concerns may continue indefinitely and limit the bounce by the euro," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.
The Turkish lira was little changed at 5.87 per dollar , and the closure of Turkish financial markets for a string of national holidays during August 21-24 also provided some respite. The lira plunged to a record low of 7.24 on Monday before mounting a three-day rebound, helped by factors including measures by the Turkish central bank to support its currency and Qatar's pledge to invest $15 billion in Turkey.
However, there are still concerns over Turkish President Tayyip Erdogan's policies to combat the country's double-digit inflation and his row with Washington over detained American pastor Andrew Brunson. Meanwhile a rebound by onshore Chinese yuan faded, with the currency last standing a touch firmer at 6.8864 per dollar after briefly strengthening to 6.8630.