• The dollar touched a one-week low versus the yen on Tuesday as investors turned cautious following news that investigators probing Russian interference in the U.S. election had charged President Donald Trump’s former campaign manager.
Against a basket of six major currencies, the dollar was steady at 94.583 .DXY, down from a three-month high of 95.150 scaled on Friday.
The yen showed limited reaction after the Bank of Japan kept its monetary policy steady on Tuesday as widely expected, even as it slightly cut its inflation forecast for the current fiscal year.
The dollar held steady at 113.17 yen JPY=, having slipped to as low as 112.97 yen in early Asian trade, its lowest level since Oct. 20.
Federal investigators probing Russian interference in the 2016 U.S. election charged Trump’s former campaign manager, Paul Manafort, and another aide, Rick Gates, with money laundering on Monday.
The dollar also struggled in the wake of reports that Trump was likely to pick Federal Reserve Governor Jerome Powell as the next head of the U.S. central bank.
Powell is seen as being more dovish on monetary policy than other contenders for the post, especially compared to Stanford University economist John Taylor, who has been regarded as another top challenger for the position.
• Today's data from the U.S. met the markets' expectations, keeping the December rate hike expectations near 97% according to the CME Group FedWatch Tool.
• The euro eased 0.1 percent to $1.1635 EUR=, but held above a three-month low of $1.1574 touched on Friday.
• No matter who would be Fed chair next year, the central bank is expected to become a much more hawkish institution.
The Fed begins a two-day meeting Tuesday, a meeting that is expected to be uneventful but is occurring just before President Donald Trump names a new Fed chair Thursday to replace Janet Yellen.
• Federal investigators probing Russian interference in the 2016 U.S. election charged President Donald Trump’s former campaign manager Paul Manafort and another aide, Rick Gates, with money laundering on Monday.
A third former Trump adviser, George Papadopoulos, pleaded guilty in early October to lying to the FBI, it was announced on Monday.
• President Donald Trump’s top national security aides pushed back on Monday against U.S. lawmakers calling for a new congressional war authorisation, saying it would be a mistake to impose geographic or time limits on the campaign against Islamic State and other militant groups.
“War is fundamentally unpredictable,” Secretary of Defense Jim Mattis told a Senate hearing about a potential new authorization for the use of military force, or AUMF, Congress’ most significant step in years towards taking back control of its constitutional right to authorise war.
• China has flown bomber jets near the United States territory of Guam and practiced attacks against the island, according to U.S. military officials, Defense News reported Tuesday.
Chinese firepower, along with its host of provocative military activities, is causing the United States to worry about the country as a primary danger in the Pacific region — even as rogue nation North Korea continues to threaten international attacks, the report said.
• Growth in China’s manufacturing sector cooled more than expected in October in the face of tighter pollution rules that are forcing many steel mills, smelters and factories to curtail production over the winter.
The official Purchasing Managers’ Index (PMI) released on Tuesday fell to 51.6 in October, from 52.4 in September, which was the strongest in over five years.
• The Bank of Japan kept monetary policy steady and roughly maintained its ambitious price forecasts on Tuesday, pointing to signs of growing strength in the economy that policymakers hope will accelerate inflation toward its elusive 2 percent target.
Board newcomer Goushi Kataoka made no proposal on additional easing, defying market expectations he might do so after dissenting to last month’s BOJ decision to keep policy steady.
• Japan’s industrial output fell less than expected in September and companies expect output to rise in October - keeping the economy on an expansion path.
Labor demand remained at the strongest level in 43 years, but household spending unexpectedly fell in September, raising some concern about the lack of impact a tight jobs market had on consumer spending.
Industrial output fell 1.1 percent in September because of a fall in output of memory chips, equipment to make flat panel displays, and heavy machinery used in construction, trade ministry data showed on Tuesday.
The jobs-to-applicants ratio also held steady at 1.52 in September from the previous month, showing labor demand remains at the strongest in 43 years. The median estimate wa
• South Korea and China have agreed to work swiftly to get their relations back on track following a year-long standoff over the deployment of a controversial U.S. anti-missile system in South Korea.
• Oil prices eased on Tuesday as traders took profits following days of gains and as the prospect of increasing U.S. exports dampened overall bullish sentiment that has driven Brent above $60 per barrel.
Brent crude futures LCOc1, the international benchmark for oil prices, were at $60.77 per barrel at 0646 GMT. That was 13 cents, or 0.2 percent, below their last settlement, but still not far off July 2015-highs reached earlier this week, and up some 37 percent since their 2017-lows last June.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $54 a barrel, 15 cents below their last close. That was near their highest level since February and up around 28 percent since 2017-lows marked in June.
Reference: Reuters, CNBC, FXStreet
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