· The euro held firm on Thursday ahead of a European Central Bank policy meeting, while the Canadian dollar hovered at two-year highs after the Bank of Canada surprised many by raising interest rates.
· The Bank of Canada raised interest rates by 25 basis points to 1 percent on Wednesday, surprising many, and left the door open to more rate hikes in 2017.
· The euro edged up 0.1 percent to $1.1928, although it was still trading below last week’s high of $1.2070, its highest level since January 2015.
· The dollar lost some ground after edging up against the Japanese currency on the news overnight. The greenback slipped below the 109 handle to fetch 108.97 yen at 8:278 a.m. HK/SIN.
Against a basket of currencies, the greenback was mostly unchanged from the previous session. The dollar index last stood at 92.195.
· The focus is on whether ECB President Mario Draghi expresses any concerns about the euro’s recent strength.
· “The market expects him (Draghi) to say something about it,” said Tareck Horchani, head of sales trading in Asia Pacific for Saxo Markets in Singapore, referring to the euro’s rise.
The euro could rally if the ECB and Draghi don’t mention anything about the euro’s strength, Horchani said.
If they do, and the euro sells off, the common currency may find support in the $1.17 to $1.18 area in the near term, Horchani added.
· Donald Trump has agreed to a Democratic plan to lift the debt limit for three months, fund the government and rush aid to Hurricane Harvey victims.
The US president went against Republican leaders who wanted to extend a debt-limit increase for longer, until after the 2018 mid-term elections.
· Democrats announced the deal just before the House of Representatives passed $8bn (£6bn) for Harvey victims. Congress will need to approve the deal before it is finalised.
· President Donald Trump forged a surprising deal with Democrats in Congress on Wednesday to extend the U.S. debt limit and provide government funding until Dec. 15, embracing his political adversaries and blindsiding fellow Republicans in a rare bipartisan accord.
President Donald Trump warned on Wednesday that the United States would no longer tolerate North Korea’s actions but said the use of military force against Pyongyang will not be his “first choice.”
· President Donald Trump’s top national security advisers stressed efforts to find a diplomatic solution to the North Korea crisis to Congress on Wednesday, staying far from Trump’s tough talk of potential “fire and fury” military responses to Pyongyang’s missile program.
With no palatable military options, U.S. President Donald Trump may ultimately have no choice but to give diplomacy a chance to end the crisis over North Korea’s nuclear and missile programs.
· Federal Reserve Vice-Chairman Stanley Fischer said Wednesday that he plans to resign from his post in mid-October. In a letter to President Donald Trump, Fischer, 73, said he was leaving for personal reasons.
Fischer's term as vice chairman was set to expire next June. Fischer said the economy has continued to strengthen since he joinned the Fed in 2014. He also said he was proud to have made the financial system stronger and more resilient after the financial crisis.
· The U.S. economy expanded at a modest to moderate pace in July through mid-August but signs of an acceleration in inflation remained slight, the latest survey conducted by the Federal Reserve showed on Wednesday.
· European Central Bank President Mario Draghi is set to start laying the groundwork for stimulus reduction when policymakers meet on Thursday, giving investors some hints but probably holding off on any major commitment.
Concerned that strong signals could raise market volatility and undo its plans, ECB policymakers are seen shifting their message only incrementally, setting up for a bigger move in October or December, before its 2.3 trillion euro ($2.74 trillion) bond purchase scheme expires at the end of the year.
· Oil prices rose more than 1 percent on Wednesday as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Hurricane Harvey.
Brent LCOc1 had gained 82 cents to settle at $54.20 a barrel. U.S. West Texas Intermediate (WTI) crude futures Clc1 were up 50 cents at $49.16 a barrel. Prices were little-changed after industry data showed U.S. crude stockpiles increased last the week.
Reference: Reuters, BBC, Market Watch, CNBC
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