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· The U.S. dollar edged lower from four-week highs against the safe-haven Japanese yen and slipped versus the Swiss franc on Friday as possible renewed U.S.-Iran tensions weighed on market sentiment.

The greenback was also pressured by weaker-than-expected U.S. payrolls data for December, which followed a batch of strong economic figures. The report, however, was unlikely to sway the Federal Reserve from its neutral stance on interest rates.

U.S. data showed non-farm payrolls increased by 145,000 last month, lower than market forecasts of 164,000. Data for October and November was revised to show 14,000 fewer jobs added than previously reported.

More importantly, average hourly earnings rose just 0.1%, after increasing 0.3% in November. Markets were expecting a 0.3% rise.

The dollar index still posted its best weekly performance in two months.

Concerns grew, however, after the United States imposed more sanctions on Iran on Friday in response to its retaliatory missile attack on U.S. forces in Iraq and vowed to tighten the screws further on the Iranian economy if Tehran continued to engage in what it described as terrorist acts.

Against a basket of currencies .DXY, the dollar fell 0.1% to 97.30. The dollar index hit a two-week high of 97.584 during the session.

The dollar also eased from a four-week peak against the yen to trade slightly lower on the day at 109.49 yen JPY=.

· “The silver lining here is that a job and income growth slowdown has already been incorporated into our 2020 economic outlook. So while the December jobs and income data was somewhat worse than we forecast, the 2020 outlook for a U.S. GDP growth slowdown, but no recession, remains intact,” said Scott Anderson, chief economist, at Bank of the West.

· China's U.S. trade deal commitments not changed in translation: Mnuchin

China’s commitments in the Phase 1 trade deal with the United States were not changed during a lengthy translation process and will be released this week as the document is signed in Washington, U.S. Treasury Secretary Steven Mnuchin said on Sunday.

Mnuchin told Fox News Channel that the deal reached on Dec. 13 still calls for China to buy $40 billion to $50 billion worth of U.S. agricultural products annually and a total of $200 billion of U.S. goods over two years.

· U.S., China agree to semi-annual talks aimed at reforms, resolving disputes

The United States and China have agreed to restart semi-annual talks aimed at resolving economic disputes between the two countries, a process abandoned at the start of the Trump administration as a trade conflict between the countries escalated.

An official familiar with the deliberations said the resumption of the U.S. China Comprehensive Economic Dialogue will be announced on Jan. 15 as part of the signing of a Phase 1 trade deal between the U.S. and China.

The restart of the meetings was first reported by the Wall Street Journal.

· China says will not change position on Taiwan after landslide election

China will not change its position that Taiwan belongs to it, Beijing said on Sunday, after President Tsai Ing-wen won re-election and said she would not submit to China’s threats, as state media warned she was courting disaster.

The election campaign was dominated by China’s efforts to get the democratic island to accept Beijing’s rule under a “one country, two systems” model, as well as by anti-government protests in Chinese-ruled Hong Kong.

“No matter what changes there are to the internal situation in Taiwan, the basic fact that there is only one China in the world and Taiwan is part of China will not change,” China’s Foreign Ministry said in a statement.

Tsai, who has firmly rejected China’s “one country, two systems” model, won another four-year term by a landslide on Saturday, and her Democratic Progressive Party (DPP) secured a majority in parliament.

“Taiwan’s people once again use the vote in their hands to show the world the value of democracy,” Tsai said on Sunday when meeting the head of the United States’ de facto embassy in Taipei, Brent Christensen.

“Democracy and freedom are indeed Taiwan’s most valuable asset and the foundation of the long-term Taiwan-U.S. partnership,” Tsai said, vowing to deepen cooperation with the United States on issues from defense to economy.

On Saturday, Tsai called for talks to resume with China, but said she hoped Beijing understood Taiwan and its people would not submit to intimidation.



· US imposes new sanctions on Iran

The Trump administration on Friday imposed new sanctions on Iran following attacks on US and allied troops in Iraq earlier in the week.

The latest round of penalties by the United States is set to target multiple sectors of the Islamic Republic's economy -- including construction, manufacturing, textiles and mining -- and name eight top officials, some of whom were already under sanction.

"This order will have a major impact on the Iranian economy," President Donald Trump said in a statement. "These punishing economic sanctions will remain until the Iranian regime changes its behavior."



· Trump tells Iranian protesters he stands with them and warns Tehran: ‘The world is watching’

President Donald Trump expressed solidarity with Iranian protesters as they took to the streets of Tehran over the weekend, after the Islamic Republic admitted it accidentally shot down a Ukraine-bound airliner, killing all 176 people on board the Boeing aircraft.



Trump, in Twitter messages written in both Farsi and English Saturday, called on Tehran to allow human rights groups to report facts from the ground and warned the government that the “world is watching.”

The president warned Iran’s leaders on Sunday not to kill protesters and to let reporters move freely. Protests against the Iranian government in November led to a crackdown that resulted in hundreds of deaths, according to human rights groups.

Hundreds of protesters in Tehran chanted anti-government slogans against the Islamic Republic’s leaders on Saturday, according to Iran’s semi-official Fars news agency. The protesters, who numbered between 700 to 1,000, tore up pictures of Gen. Qasem Soleimani, who was killed in a U.S. drone strike in Iraq last week.

“They are lying that our enemy is America, our enemy is right here,” one group of protesters chanted outside a university in Tehran, according to video posted on Twitter.



· North Korea has received birthday greetings to its leader Kim Jong Un from U.S. President Donald Trump, but their personal relationship is not enough for a return to talks, according to a statement published on Saturday by state news agency KCNA.



· Oil falls below $65/bbl in first weekly drop since November

Oil fell below $65 a barrel on Friday in its first weekly loss since late November, erasing the week’s risk premium added since a U.S. drone strike killed a top Iranian general as investors focused on rising U.S. inventories and other signs of ample supply.

However, markets were still eyeing the longer-term risks of conflict, and prices were briefly supported on Friday by new U.S. sanctions on Iran in retaliation for its missile attack on U.S. forces in Iraq this week.

Also, a Russian navy ship “aggressively approached” a U.S. Navy destroyer in the North Arabian Sea on Thursday, the U.S. Navy’s Bahrain-based Fifth Fleet said in a statement on Friday.

Brent crude LCOc1, the global benchmark, settled at $64.98, down 39 cents. West Texas Intermediate crude CLc1 fell 52 cents to end at $59.04.

For the week, Brent had a 5.3% loss and WTI had a 6.4% decline, with both benchmarks now below where levels were before the U.S. drone strike killed Iranian general Qassem Soleimani on Jan. 3.

Reference: Reuters, CNBC, CNN