• The U.S. dollar rose on Wednesday, marking its biggest one-day gain in more than three months against a basket of currencies, even as Wall Street recovered from Monday’s stock market rout and limited the greenback’s safe-haven appeal.
The index that tracks the dollar against a basket of six currencies extended its winning streak to four sessions. It was last up 0.80 percent at 90.298.
Much of the dollar’s advance stemmed from euro’s weakness in the wake of reports that the leader of Germany’s Social Democrats (SPD), Martin Schulz, would not be taking over as finance minister for Europe’s biggest economy.
• The euro’s fall accelerated after European Central Bank policymaker Ewald Nowotny told the German Wiener Zeitung newspaper the United States is deliberately weakening the dollar.
The euro was down 0.82 percent at $1.2274, while the Australian and New Zealand dollar were down 1.02 percent and down 1.59 percent, respectively.
The U.S. dollar touched a high of 109.710 yen earlier Wednesday as Tokyo’s Nikkei soared, taking their cue from a late Tuesday rebound on Wall Street.
• The Federal Reserve will stick to its plan for “steady, gradual” interest-rate increases even though recent U.S. economic data has been stronger than some have expected and the labor market has tightened, a Fed policymaker said Wednesday.
• Federal Reserve Bank of New York leader William Dudley said Wednesday the stock market’s wild swings over recent days haven’t changed his assessment of the economy and monetary policy.
• U.S. Senate leaders from both parties on Wednesday reached a deal to raise government spending and take other steps meant to curb Capitol Hill budget squabbling.
The complex agreement, backed by House of Representatives Speaker Paul Ryan, could face resistance among conservative House Republicans concerned about the deficit impact.
High-stakes votes in both chambers were expected on Thursday, when a deadline will arrive for Congress to approve a stopgap spending bill to avert a government shutdown. The deal also includes another stopgap measure to buy time for budget writers to flesh out the details of the two-year spending deal.
• Republican U.S. senators left a trade-focused meeting with President Donald Trump on Wednesday expressing optimism that Trump is less likely to scuttle the NAFTA trade pact than previously feared, and would press ahead with talks to modernize it.
Senate Finance Committee Chairman Orrin Hatch said Republican members of the panel told Trump that preserving the North American Free Trade Agreement was “vital” for U.S. jobs and that weakening the agreement would “jeopardize American economic growth.”
• Canada “might very well be better off” not signing up to an updated version of the NAFTA trade pact rather than accepting a bad deal, Canadian Prime Minister Justin Trudeau said on Wednesday.
• The Bank of England is expected to say on Thursday that another interest rate increase could be nearing as Britain’s economy grows faster than expected ahead of its departure from the European Union in just over a year’s time.
The BoE raised borrowing costs for the first time in more than a decade in November, reversing a cut made in 2016 as the country reeled from the Brexit vote shock and taking them back to 0.50 percent.
• Oil prices fell to a one-month low on Wednesday after U.S. data showed a build in inventories and record high crude production, raising worries of more selling that could expose speculators with big bets on upward momentum in crude prices.
U.S. West Texas Intermediate (WTI) crude CLc1 fell $1.60, or 2.5 percent, to settle at $61.79 a barrel. WTI hit a low of $61.33, the lowest since Jan. 5. Volumes were heavy, with more than 957,000 front-month futures trading, far more than the average of 634,000 contracts over the last 200 days. Brent crude futures LCOc1 fell $1.35, or 2 percent, to $65.51 a barrel.
U.S. WTI prices have slid for four straight sessions, down 6 percent in that time.
Reference: Reuters
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