• The dollar has firmed up after Steven Mnuchin — the US Treasury secretary whose statements about a weaker US dollar being better for American trade hurt the greenback last week — reportedly said a strong dollar would be in the country’s long-term interest.
The dollar index bounced back from a low of 88.91 touched earlier in the session to trade with a slightly smaller 0.14 per cent loss to 89.183.
Mr Mnuchin’s remarks were reported by Bloomberg on Tuesday. The Treasury secretary rattled the buck last week by saying that a weaker dollar would help bolster trade, comments that his boss, President Donald Trump, walked back the next day. Mr Trump said that Mr Mnuchin had been misunderstood, telling CNBC in an interview: “the dollar is going to get stronger and stronger and ultimately I want to see a strong dollar.”
Tuesday’s comments echo what Mr Mnuchin told CNBC on Friday about supporting a stronger dollar in the US’s long-term interests.
The dollar fell on Tuesday, reversing its gains from the day before, ahead of a Federal Reserve monetary policy decision on Wednesday, while the euro and the Japanese yen strengthened against the greenback.
• The dollar pared losses throughout the day and was last down 0.10 percent against a basket of six major currencies .DXY at 89.219 at 3:34 p.m. ET (2034 GMT). The index pulled up from a low of around 88.43 set last week, its weakest level since December 2014.
The euro EUR= gained 0.11 percent to $1.2395, still a way from a three-year high of $1.2536 touched last week.
The Japanese yen strengthened 0.11 percent versus the greenback at 108.86 per dollar.
• Analysts expect the Fed to hold interest rates steady at the end of the meeting on Wednesday, but strike a hawkish tone in its statement, which would typically be positive for the dollar.
• Traders are cautious ahead of a slate of events this week, including the U.S. Federal Reserve’s two-day monetary policy meeting and a U.S. jobs report on Friday that will include data on nonfarm payrolls and average hourly earnings. The Fed began its meeting on Tuesday.
• A spike in global bond yields, with 10-year U.S. bond yields pushing well above 2.70 percent, their highest since April 2014, prompted some investors to cut some short positions and pushed the dollar higher on Monday.
While yields fell overnight, benchmark U.S. 10-year yields, which move inversely to prices, touched their highest in nearly four years later on Tuesday, and 30-year yields climbed to their highest since May 2017.
• U.S consumer confidence rebounded in January and house prices increased further in November, suggesting that a recent acceleration in consumer spending was likely to be sustained despite sluggish wage growth.
The Conference Board said its consumer confidence index increased 2.3 points to a reading of 125.4 this month.
• Trump to deliver his first State of the Union address this morning!
Tonight, President Donald Trump is delivering his first official State of the Union address on Capitol Hill, just a little over a year into his presidency. His speech will begin just after 9 p.m. ET before a joint session of Congress.
Mr. Trump is expected to tout economic progress under his leadership as well as legislative accomplishments including the Republican-sponsored tax overhaul that he signed into law in December. The president will also likely highlight the need for an immigration fix. Other unfinished items on his agenda include an infrastructure deal, a boost to military funding and a repeal of Obamacare.
• The U.S. House Intelligence Committee voted along party lines on Monday to release a classified memo that Republicans say shows anti-Trump bias by the FBI and the Justice Department in seeking a warrant to conduct an intelligence eavesdropping operation.
The move added new fuel to bitter partisan wrangling over investigations by congressional committees and Special Counsel Robert Mueller into alleged Russian meddling in the 2016 election.
• North Korea’s nuclear program has made strides in recent months but the country has not yet demonstrated all the components of an intercontinental ballistic missile (ICBM), including a survivable re-entry vehicle, the vice chairman of the U.S. Joint Chiefs of Staff said on Tuesday.
• Oil prices dipped for a second straight day on Tuesday, driven by ongoing evidence of rising U.S. crude output, while wary investors sold off stocks, bonds and commodities.
Brent crude futures LCOc1 for March delivery settled down 44 cents, or 0.6 percent, at $69.02 a barrel after touching a session low of $68.40.
U.S. West Texas Intermediate futures CLc1 fell $1.06, or 1.6 percent, to close at $64.50 a barrel.
• Futures traded weaker in post-settlement trading after weekly inventory figures from industry group the American Petroleum Institute showed a 3.2 million-barrel increase in crude oil stocks for last week. [API/S]
If the U.S. Energy Department data on Wednesday also shows an increase in inventories, it would break an 11-week streak of drawdowns. Analysts polled by Reuters forecast an average 100,000-barrel build in crude stocks.
Reference: Reuters, CBS News
Thai
Eng