· The U.S. dollar gained on Thursday as data pointed to solid U.S. growth, though the dollar index held under seven-week highs due to caution over how much Friday’s employment report for September will be impacted by recent hurricanes.
· The dollar index .DXY against a basket of six major currencies rose as high as 93.851, but held below the seven-week high of 93.92 reached on Tuesday as traders waited for Friday’s payrolls.
· The U.S. trade deficit fell in August as exports of goods and services rose to the highest level in more than2-1/2 years, while the number of Americans filing for unemployment benefits fell more than expected last week.
· New orders for U.S.-made goods rose in August and orders for core capital goods were stronger than previously reported, suggesting robust business spending could help offset some of the economic drag of Hurricanes Harvey and Irma.
· Interest rate futures traders are now pricing in an 84 percent likelihood of a December rate hike, up from 78percent a week ago, according to the CME Group’s FedWatch Tool.
· The euro also fell after European Central Bank meeting minutes were interpreted as slightly dovish. The single currency EUR= was last down 0.30 percent against the greenback at $1.1725.
· More rules and regulations are not always the best solution to problems in financial markets and U.S. government agencies must take a balanced approach to such decisions, an influential governor being considered to lead the Federal Reserve said on Thursday.
Fed Governor Jerome Powell, seen as a contender as U.S. President Donald Trump considers who might replace Fed Chair Janet Yellen, told a gathering of bankers, lawyers and investors that industry groups can help to “fill in the cracks” left by competing regulations enforced by various U.S. agencies.
· The U.S. will remain stuck in growth around 2 percent until lawmakers come up with a tax plan to boost the economy, Philadelphia Fed President Patrick Harker said Thursday.
· Philadelphia Fed President Patrick Harker separately told CNBC television earlier on Thursday that he’s “penciled in” a move in December and three hikes next year. He’s a voting member this year of the Federal Open Market Committee, which is scheduled to meet next on Oct. 31-Nov. 1.
· Federal Reserve Bank of San Francisco President John Williams said moderate growth and his outlook for higher inflation will allow the U.S. central bank to raise interest rates, while his counterpart in Philadelphia signaled he’s anticipating a hike in December.
· Federal Reserve officials have started to push back on the idea that the Trump administration’s tax cut plan would boost the economy, cautioning it could instead trigger high inflation, unsustainable debt and an eventual return to sub-par growth.
Slashing personal or corporate tax rates could boost short-term growth as households and businesses spend more, Fed policymakers acknowledged, but those benefits could prove short lived due to broad trends like population aging and rising indebtedness.
The remarks about U.S. President Donald Trump’s proposed tax overhaul come as he is ramping up a search for a new Fed chair, promising a decision this month.
· Oil prices rose about 2 percent on Thursday as signs Saudi Arabia and Russia would limit production through next year pushed the U.S. benchmark back above $50 a barrel.
The news outweighed Wednesday’s U.S. data showing record U.S. exports and the return of production at a major Libyan oilfield.
Brent futures LCOc1 settled at $57 a barrel, up 2.2 percent, or $1.20, while U.S. crude CLc1 rose 81 cents, or 1.6percent, to end at $50.79.
· Russian President Vladimir Putin said this week that a pledge by the Organization of the Petroleum Exporting Countries and other producers, including Russia, to cut oil output to boost prices could be extended to the end of2018, instead of expiring in March 2018.
Russian Energy Minister Alexander Novak said on Thursday that Moscow would support new countries joining the agreement to restrict oil supply.
Reference: Reuters, Bloomberg
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