• The dollar rose on Tuesday to a four-day high against the Japanese yen after Chinese President Xi Jinping promised to cut import tariffs, easing concerns about a U.S.-China trade conflict between that had fed safe-haven demand for yen. The dollar was up 0.38 percent at 107.16 yen.
Speaking at the Boao Forum for Asia in China’s Hainan province, Xi vowed to open China’s economy further and protect intellectual property of foreign firms. He also criticized a “Cold War mentality” as obsolete, in his first public comments since the trade dispute erupted with U.S. President Donald Trump’s administration.
U.S. President Donald Trump is encouraged by Chinese President Xi Jinping’s promise to further open its economy, but will continue pushing for concrete changes to Beijing’s trade policy, the White House said on Tuesday.
- The dollar index .DXY, which measures the greenback against a basket of six major currencies, was down 0.23 percent at 89.634, still close to a nearly two-week low.
The dollar index did not get much of a boost from data showing U.S. producer prices increased more than expected in March.
- The euro was up 0.28 percent against the dollar after European Central Bank policymaker Ewald Nowotny told Reuters in an interview that its 2.55-trillion euro ($3.15 trillion) bond buying program would be wound down by the end of this year, which would then pave the way for the bank’s first rate rise since a fumbled move in 2011.
- The dollar was up 3.56 percent against the Russian rouble RUB=, its strongest since December 2016, as a sell-off of Russian assets continued. The investor exodus began on Friday, when the United States imposed sanctions against 17 senior government officials plus seven oligarchs and 12 companies they own or control.
• U.S. producer prices increased more than expected in March, boosted by rising healthcare and food costs, pointing to a steady buildup of inflation pressures.
Most economists believe that strengthening inflation will prompt the Federal Reserve to raise interest rates three more times this year. The U.S. central bank increased borrowing costs last month and forecast at least two more rate hikes in 2018.
The Labor Department said on Tuesday its producer price index for final demand rose 0.3 percent last month after increasing 0.2 percent in February. That lifted the year-on-year increase in the PPI to 3.0percent from 2.8 percent in February.
A key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.4 percent last month, advancing by the same margin for a third straight month.
The so-called core PPI increased 2.9 percent in the 12 months through March, the biggest gain since August 2014, after climbing 2.7 percent in February.
• The Republican leader in the U.S. Senate said on Tuesday he was open to discussing potential legislation to cut government spending from levels recently approved by Congress, but indicated some doubt on whether such as goal could be reached.
“I’m willing to discuss with the administration the possibility of some kind of (spending) rescissions package,” Senate Majority Leader Mitch McConnell told reporters. “I think it’s worth a discussion. Whether that’s achievable is another matter.”
• U.S. President Donald Trump’s homeland security adviser, Tom Bossert, has resigned at the request of new national security adviser John Bolton, an administration official said on Tuesday, marking the latest departure from the White House of a senior adviser.
Bossert, who was a former deputy national security adviser to former President George W. Bush, had overseen the Trump administration’s response to the Hurricane Maria disaster in Puerto Rico, as well as cyber security policy. An official said Bolton, who started his new role on Monday, urged Bossert’s departure.
A source close to Bolton said other departures might be upcoming as the new national security adviser builds his own team in some sectors.
• U.S. President Donald Trump believes he has the power to dismiss special counsel Robert Mueller, the White House said on Tuesday.
Trump had replied, “We’ll see what happens” when he was asked on Monday if he would fire Mueller following the FBI’s raiding of the offices and home of the president’s personal lawyer Michael Cohen.
• The Federal Reserve on Tuesday proposed new rules that could allow some large banks to reduce the amount of capital they must hold as a cushion against a future economic shock.
The proposal may clear the way for some large banks to reduce their capital levels in the future but the largest firms on Wall Street are not likely to get such relief, the Fed said.
The proposal is expected to reduce bank paperwork and also make it easier for regulators to monitor the health of banks, said Randal Quarles who is the top Fed official in charge of regulations.
• British Prime Minister Theresa May and U.S. President Donald Trump have said the world must act to ensure those behind a suspected chemical attack in Syria are held to account, as Washington considers a multinational military response.
• Oil prices surged more than 3 percent on Tuesday as investors grew more confident the United States and China would resolve their trade dispute without damaging the global economy, while Middle East tensions and a weak dollar also supported prices.
Brent crude futures jumped $2.39, or 3.5 percent, to settle at $71.04 a barrel. This was its largest single-day percentage gain since September. In post-settlement trading, Brent hit $71.34, its highest since December 2014.
West Texas Intermediate crude futures gained 3.3 percent, or $2.09, to settle at $65.51 a barrel.
Reference: Reuters
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