· The dollar lost momentum on Thursday after the double-whammy of dovish-looking minutes of the Federal Reserve’s last policy meeting and the threat by U.S. President Donald Trump of imposing new tariffs on imported cars.
The euro was hampered by concerns over an economic slowdown in the currency bloc and political risks in Italy, staying near a six-month low against the dollar and a nine-month nadir versus the yen.
Measured against a basket of six major currencies , the dollar stepped back to 98.865 from its five-month high of 94.195 hit just before the release of the Fed’s minutes.
Against the yen, the dollar shed as much as 0.6 percent to 109.45 yen, a day after it had fallen 0.73 percent, its biggest fall in nearly three months. It last stood at 109.61 yen, down 0.4 percent on the day.
The euro bounced back slightly to $1.1705 after hitting a six-month low of $1.1676 on Wednesday but the common currency was held back by economic and political worries in Europe.
· The euro rose off a six-month low on Thursday as China signaled its confidence in the single currency but concerns over an economic slowdown in Europe and political risks in Italy continued to act as a brake.
The euro is set to slump for a sixth consecutive week against the dollar — the longest weekly losing streak since January 2015 — hobbled by worries over a deepening economic slowdown in the currency bloc.
On Thursday China’s Premier Li Keqiang said China was a long-term and responsible investor in the euro and hoped the currency would be strong and steady in spite of the occasional sovereign debt crisis in Europe.
The euro bounced back slightly to $1.1725 EUR=EBS after hitting a six-month low of $1.1676 on Wednesday but gains were capped by economic and political worries in Europe.
Italian President Sergio Mattarella on Wednesday gave political novice Giuseppe Conte a mandate to lead the first government in Italy made up of anti-establishment parties that have vowed to shake up the European Union.
· German consumer sentiment deteriorated further heading into June to reach the lowest level so far in 2018, a survey showed on Thursday, suggesting that household spending in Europe’s biggest economy could slow in the coming months.
The Nuremberg-based GfK institute said its consumer sentiment indicator, which is based on a survey of around 2,000 Germans, slipped for the second month in a row to 10.7 points going into June from 10.8 in May. That compared with a Reuters consensus forecast for the index to stay unchanged at 10.8.
· Bank of Japan board member Makoto Sakurai said on Thursday excessive monetary easing could destabilize the economy and suggested the central bank could whittle down its massive stimulus programme if growth continues to strengthen.
But he stressed that it was premature to exit ultra-loose policy now, as inflation remains distant from the BOJ’s 2 percent target and labor shortages have yet to boost wages.
· The Pentagon on Wednesday uninvited China from a major U.S.-hosted naval drill in response to what it sees as Beijing’s militarization of islands in the South China Sea, a decision China called unconstructive.
“As an initial response to China’s continued militarization of the South China Sea we have disinvited the PLA Navy from the 2018 Rim of the Pacific (RIMPAC) Exercise,” said Lieutenant Colonel Christopher Logan, a Pentagon spokesman.
PLA is the English-language acronym of China’s military, the People’s Liberation Army.
Logan did not specify what else the U.S. government might do to respond but stressed there was “strong evidence” that China had deployed anti-ship missiles, surface-to-air missile systems and electronic jammers to contested features in the Spratly Islands.
· China on Thursday criticized the United States for uninviting it from a major U.S.-hosted naval drill in response to what it sees as Beijing’s militarization of islands in the disputed South China Sea.
China has sovereign rights in the South China Sea and it is not realistic for the United States to use this kind of action to try to coerce it, Foreign Ministry spokesman Lu Kang told a daily news briefing.
· Oil prices fell on Thursday on expectations that OPEC members will step up production in the face of worries over supply from both Venezuela and Iran.
International benchmark Brent LCOc1 futures were down 37 cents, or 0.46 percent, at $79.43 per barrel at 0610 GMT.
WTI crude CLc1 futures were down 27 cents, or 0.38 percent, at $71.57 a barrel.
Reference: Reuters, CNBC,
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