• The euro fell on Thursday as the dollar recovered and traders reduced their positions before a European Central Bank meeting later in the day where it could signal some baby steps towards ending monetary stimulus.
After earlier trading flat, the euro fell back 0.3 percent to $1.2377 EUR= as the dollar staged a recovery.
The dollar rose 0.2 percent against a basket of major currencies at 89.800 .DXY after pulling away from a two-week trough of 89.407 the previous day.
• The ECB keep monetary policy unchanged on Thursday, as was expected.
“Everything else is unchanged in the statement. We expect Draghi to take a dovish stance in the policy to offset any lingering nervousness in the markets that the Governing Council is changing its forward guidance,” Antje Praefcke, currency strategist at Commerzbank in Frankfurt.
“The dropping of the easing bias is consistent with recent political and economic developments.”
• U.S. President Donald Trump pressed ahead on Thursday with import tariffs of 25 percent on steel and 10 percent for aluminum but exempted Canada and Mexico and offered the possibility of excluding other allies, backtracking from an earlier “no-exceptions” stance.
Plans for the tariffs, set to start in 15 days, have stirred opposition from business leaders and prominent members of Trump’s own Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy.
Within minutes of the announcement, U.S. Republican Senator Jeff Flake, a Trump critic, said he would introduce a bill to nullify the tariffs. Republican Orrin Hatch, who chairs the Senate Finance Committee, said he would work with the White House to “mitigate the damage.”
But some Democrats praised the move, including Senator Joe Manchin of West Virginia, who said it was “past time to defend our interests, our security and our workers in the global economy and that is exactly what the president is proposing with these tariffs.”
• U.S. plans for steel and aluminum tariffs and rising protectionist rhetoric carry potentially serious consequences and it is too soon to call the “all clear” even with a temporary exemption for Canada, a Bank of Canada official said on Thursday.
• European Central Bank (ECB) President Mario Draghi fired a warning shot Thursday over the dangers of President Donald Trump's threat of trade tariffs.
He said the immediate spillover of the measures won't be big but noted a wider concern.
The ECB president added that Trump's recent trade threats did not bode well for previously healthy relations between the U.S. and the European Union.
• Eleven countries including Japan and Canada signed a landmark Asia-Pacific trade agreement without the United States on Thursday in what one minister called a powerful signal against protectionism and trade wars.
• International Monetary Fund Managing Director Christine Lagarde said on Thursday that she feared a “tit-for-tat” escalation of trade retaliation over U.S. President Donald Trump’s steel and aluminum tariffs that would sap business confidence and investment.
• Japan is set to keep monetary policy steady and reassure investors it’s in no rush to dial back its massive stimulus, as it seeks to carefully manage market expectations about the timing of an eventual exit from crisis-era policy.
While the Bank of Japan is seen clinging to its rosy view on the economy, fears of a global trade war, recent market volatility and a strong yen give it plenty of reasons to go slow in the exit process, analysts say.
• Oil prices fell on Thursday, headed for a second straight weekly drop on a stronger dollar, signs of an inventory build at the U.S. storage hub in Cushing, Oklahoma, surging U.S. crude production and investor jitters about a potential trade war.
Brent crude futures LCOc1 fell 73 cents, or 1.1 percent, to settle at $63.61 per barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 fell $1.03, or 1.7percent, to settle at $60.12 per barrel.
Reference: Reuters, CNBC
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