• The dollar pared losses against a basket of major currencies on Thursday after U.S. President Donald Trump told CNBC he ultimately wants the dollar to be strong, contradicting comments made by Treasury Secretary Steven Mnuchin one day earlier.
“The dollar is going to get stronger and stronger and ultimately I want to see a strong dollar,” Trump said in an interview with CNBC, adding that Mnuchin’s comments had been misinterpreted.
Dollar index, which measures the greenback against a basket of six major currencies, was down 0.2 percent at 89.027, after having slipped to a fresh three-year low of 88.438 earlier in the session.
• The euro surged to a fresh three-year high on Thursday after European Central Bank President Mario Draghi said economic data pointed to “solid and broad” growth with inflation likely to rise in the medium term from subdued levels. The ECB kept its ultra-easy monetary policy unchanged.
The euro EUR= jumped about 1 percent to $1.2536, its highest since mid-December 2014. It was last up 0.79 percent at $1.2504.
The euro was EUR= down 0.09 percent to $1.2395. Earlier, the euro rose to its highest in three years after the European Central Bank showed little concern about the euro zone single currency's hottest run in nearly four years.
Draghi warned that the surge in the euro was a source of uncertainty and said the ECB might have to review strategy if U.S. comments on the benefits of a weak dollar lead to a change in monetary conditions.
• European Central Bank chief Mario Draghi took a swipe at Washington on Thursday for talking down the dollar, a move he said threatened a decades-old pact not to target the currency and might force his bank to change its own policy.
Singling out the euro’s surge as a source of uncertainty, Draghi said any unjustified move could force the ECB to rethink its strategy as a strong currency could put a lid on inflation, thwarting its efforts to lift prices.
• The United States would stay in the Trans-Pacific Partnership, also known as TPP, if American negotiators were able to create a better agreement, U.S. President Donald Trump said on Thursday.
• U.S. President Donald Trump is ready to sign on to a plan that would open a path to citizenship for as many as 1.8 million “Dreamers,” young immigrants brought illegally to the country as children, senior White House officials said on Thursday.
The White House presented the offer as a major concession aimed at attracting enough votes from Democrats. But it includes a number of elements such as tightening border security and deterring new immigrants to appeal to Republican hardliners.
• Sales of new U.S. single-family homes fell more than expected in December, recording their biggest drop in nearly 1-1/2 years, likely as the boost from the replacement of flood-damaged houses in parts of the South affected by hurricanes faded.
The Commerce Department said new home sales declined 9.3 percent to a seasonally adjusted annual rate of 625,000 units last month. The percentage decrease was the largest since August 2016. Unseasonably cold temperatures at the end of December probably also hurt sales.
• TIGHT LABOR MARKET In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits increased17,000 to a seasonally adjusted 233,000 for the week ended Jan. 20. Claims fell to 216,000 in the prior week, the lowest level since January 1973.
Economists had forecast claims rising to 240,000 in the latest week. Last week marked the 151st straight week that claims remained below the300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was much smaller.
• German Chancellor Angela Merkel’s conservatives open coalition talks with their Social Democrat (SPD) partners on Friday, four months after the September election that left Europe’s largest economy in an unprecedented state of political limbo.
Christian Democrat (CDU) leader Merkel will sit down with Horst Seehofer, leader of her arch-conservative Bavarian sister party and SPD leader Martin Schulz at 0800 GMT to open a week of intensive talks to thrash out a program for a repeat of the past four years of “grand coalition”.
For Merkel, the talks are her best hope of securing a fourth term as chancellor and most experts say they will probably yield a deal.
• Oil rose on Thursday, with global benchmark Brent at one point surging above $71 a barrel for the first time since 2014 on support from a weaker U.S. dollar, tighter global supplies and a record run of declines in U.S. crude inventories.
Brent crude LCOc1, the international oil benchmark, hit $71.28 a barrel, its highest since early December 2014. By 11:39 a.m. EST it was up 31cents at $70.84 a barrel.
U.S. West Texas Intermediate crude CLc1 futures for March delivery rose 44 cents to $66.05 a barrel, a 0.7 percent gain. Earlier, the contract climbed to $66.66, also the highest since December 2014.
Reference: Reuters, Business Insider
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