• The dollar rose against a basket of major currencies on Tuesday, rebounding from a five-week low hit earlier in the session, as trade tensions receded and the greenback found support from month-end flows as global asset and fund managers rebalanced their portfolios.
The dollar index .DXY, which measures the greenback against a basket of six other major currencies, was up 0.38 percent at 89.364, after slipping to a five-week low of 88.942.
• The yen JPY=, often viewed as a safe-haven currency in times of market turbulence, slipped against the greenback, but recovered most of the lost ground as U.S. stocks fell late in the day. The dollar was up 0.08 percent at 105.48 yen, after earlier rising as high as 105.9 yen.
• After a big gain on Monday, the euro had added another 0.3 percent to hit $1.2476 EUR= in early European trading, less than a cent off the three-year highs it hit in mid-February, helped by receding worries about a trade war.
But the common currency slipped 0.34 percent against the greenback after data showing that lending to euro zone companies slowed last month, and comments by European Central Bank Governing Council member Erkki Liikanen that underlying euro zone inflation may remain lower than expected even if growth is robust.
• The European Central Bank will probably decide this summer to slash its bond purchases if things develop as expected, policymaker Ewald Nowotny said on Tuesday, warning that the ECB must not fall “behind the curve”.
• The head of the Federal Reserve Bank of Atlanta, Raphael Bostic, waded into a potentially contentious debate at the U.S. central bank on Tuesday over whether to replace its 2 percent inflation target, saying he favors a new and nearly untested monetary policy strategy known as price-level targeting.
• The United States and South Korea have reached agreement in principle on a new trade pact and details will be released soon, the White House said on Tuesday.
• There is no sign that the United States is distancing itself from the World Trade Organization, and negotiations are underway to avert a global trade war, WTO Director-General Roberto Azevedo said in a BBC interview broadcast on Wednesday.
Asked if the WTO should be thinking about a Plan B without the United States, Azevedo told the BBC that he had not heard anything to suggest that such a situation was on the cards.
The question of whether U.S. tariffs were legal could only be settled by a WTO dispute panel but the damage from such unilateral actions would be felt much more quickly as other countries retaliated, leading to a global trade war, he said.
• China’s economic activity remained strong in the first quarter, with hiring close to a record high, but the outlook is cloudy as two key growth engines - property and commodities - show signs of cooling, a private survey showed on Wednesday.
• British Prime Minister Theresa May called on Tuesday for a “long-term response” by the West to the security threat from Russia as NATO followed member states in expelling Russian diplomats over the poisoning of a double agent in England.
* Ireland will expel one Russian diplomat in response to a nerve agent attack in England that the British government has blamed on Russia, a move that Moscow’s ambassador to Dublin said would not go unanswered.
* NATO has expelled seven diplomats from Russia’s mission to the alliance and blocked the appointment of three others over the nerve agent attack in Britain this month, NATO Secretary-General Jens Stoltenberg said on Tuesday.
Stoltenberg said he had also cut the maximum size of the Russian mission to 20 people from 30, in the latest move by the alliance to reduce what was once one of the biggest national delegations at NATO.
* Belgium’s government decided on Tuesday to expel a Russian diplomat over a nerve agent attack on British soil this month, becoming the latest European Union country to do so after the bloc sided with Britain in blaming Moscow.
Governments across Europe, the United States and elsewhere have announced plans to expel a total of more than 100 Russian diplomats in retaliation for the attack on a former Russian spy and his daughter on March 4. Moscow has denied being behind it.
• China said on Wednesday it won a pledge from North Korean leader Kim Jong Un to denuclearize the Korean peninsula during a meeting with President Xi Jinping, who pledged in return that China would uphold its friendship with its isolated neighbour.
• Oil prices settled slightly lower on Tuesday, only to fall in post-settlement electronic trading as stocks slumped and industry group data showed a surprising increase in crude inventories.
Brent crude futures LCOc1 touched $71 a barrel before retreating, and settled down 1 cent at $70.11 a barrel in what traders characterized as profit-taking following several days of gains. West Texas Intermediate (WTI) futures CLc1 fell 30 cents to settle at $65.25 a barrel.
Reference: Reuters
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