• The dollar inched higher versus a basket of major currencies on Tuesday, clinging above a three-year low set last week, but its outlook was clouded by concerns that the ballooning U.S. fiscal deficit could disrupt the economy.
The dollar’s index versus six major peers stood at 89.347, about 1.2 percent above Friday’s three-year low of 88.251.
The dollar has been weakening in recent months, with the positive impetus from rising U.S. interest rates offset by a barrage of bearish factors.
Against the yen, the dollar edged up 0.2 percent to 106.77 yen, having bounced back from a 15-month low of 105.545 set on Friday.
The euro eased 0.2 percent to $1.2387, backing down from Friday’s three-year high of $1.2556.
• Euro zone finance ministers on Monday chose Spanish Economy Minister Luis de Guindos to succeed European Central Bank Vice President Vitor Constancio in May.
The move is likely to boost the chances of German Bundesbank Governor Jens Weidmann becoming head of the ECB next year to succeed Mario Draghi in 2019, possibly giving the ECB’s policy a more hawkish tilt.
• Japan welcomes a positive stance by the United States toward an Asia-Pacific trade pact, but indicated that altering the agreement at this point would be very difficult.
Japan’s chief negotiator for the Trans-Pacific Partnership (TPP), Kazuyoshi Umemoto, told Reuters that an agreement among the remaining 11 member nations, set to be signed next month, may have had an impact on the United States.
“We have been working, motivated by hopes that the United States would return to the trade pact soon. We welcome it becoming positive toward the TPP,” Umemoto said on Tuesday.
• South Korea and the United States will announce plans before April for a postponed joint military drill, South Korea’s defense minister said on Tuesday.
• Oil markets were split on Tuesday, with U.S. crude pushed up by reduced flows from Canada while international Brent prices eased.
U.S. West Texas Intermediate (WTI) crude futures were at $62.38 a barrel at 0518 GMT, up 70 cents, or 1.1 percent, from their last settlement.
Brent crude futures were at $65.48 per barrel, down 19 cents, or 0.3 percent, from their last close.
Traders said the higher WTI prices were a result of reduced flows from Canada’s Keystone pipeline, which has been operating below capacity since late last year due to a leak, cutting Canadian supplies into the United States.
Outside North America, Brent crude eased on the back of a dip in Asian stocks and a stronger dollar, which potentially curbs demand as it makes fuel more expensive for countries using other currencies domestically.
Reference: Reuters, CNBC
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