· The dollar rose across the board on Tuesday, as lingering global trade tensions prompted traders to ditch most high-yielding currencies and investors focused on expectations the Federal Reserve will continue to raise interest rates.
The dollar index, which measures the greenback against a basket of six currencies, was up 0.49 percent at 94.74, on pace to snap a four-day losing streak. The index slipped 0.9 percent over the last four sessions.
The dollar was 0.1 percent higher at 110.11 yen, after going as low as 109.37 earlier on Tuesday. The yen is often sought in times of market turmoil and political tensions.
The euro was little changed at $1.1650 after losing 0.5 percent overnight, when a rise in Italian bond yields ahead of debt auctions later this week soured sentiment towards the single currency.
· Dallas Federal Reserve Bank President Robert Kaplan said on Tuesday he believes the U.S. central bank’s monetary policy is still accommodative and suggested it could raise rates at least two more times before it stops being accommodative.
The United States risks losing time and competitiveness the longer it continues its trade spat with Mexico and Canada and fails to focus on threats from China, a U.S. central banker said on Tuesday.
“Intellectual property rights and technology transfer are very big issues, where China is using the joint ventures to get technology and then compete globally,” U.S. Dallas Federal Reserve Bank President Robert Kaplan said at an event in Houston. “Let’s fight what I think is actually a very big threat, which is the relationship with China.”
· Intensifying trade tensions over the last week have raised the risks to the U.S. economy, Atlanta Federal Reserve bank president Raphael Bostic said on Tuesday, adding that he may rule out a fourth rate increase for the year if the developing trade war gets worse.
· U.S consumer confidence ebbed in June, with households a bit pessimistic about their short-term income prospects, suggesting that an apparent acceleration in economic growth in the second quarter was unlikely to be sustained.
· U.S. President Donald Trump said on Tuesday the government was completing a study about increasing import tariffs on cars from the European Union and suggested he would take action soon.
· The U.S. House of Representatives overwhelmingly passed a bill on Tuesday to tighten foreign investment rules, spurred by bipartisan concerns about Chinese bids to acquire sophisticated U.S. technology.
The bill, passed 400-2, is one of a series of measures being considered by the Trump administration and Congress to address national security concerns as well as what they see as China’s unfair trade and intellectual property practices.
· President Donald Trump on Tuesday endorsed U.S. Treasury Secretary Steven Mnuchin’s measured approach to restricting Chinese investments in U.S. technology companies, saying a strengthened merger security review committee could protect sensitive American technologies.
· Two U.S. senators urged President Donald Trump on Tuesday to reconsider his agreement with ZTE Corp (000063.SZ), saying lifting a ban on China’s second-largest telecommunications maker poses “a significant threat” to national security.
“ZTE, though publicly traded, is a state-backed enterprise that is ultimately loyal not to its shareholders, but to the Chinese Communist Party and Chinese government,” Senator Mark Warner, the Democratic vice chairman of the Intelligence Committee, and Marco Rubio, a Republican member of the committee, said in a letter to Trump.
· China’s manufacturing sector showed slower growth in the second quarter, a private survey showed on Wednesday, a worrisome trend that could add to pressure on China’s economy just as trade tensions with the United States heat up.
After two years of solid growth, manufacturers are starting to show signs of weakness, according to the quarterly survey of thousands of Chinese firms by China Beige Book International (CBB), with companies reporting the lowest growth in new export orders since late 2016 in Q2.
· Crude futures jumped over 2 percent on Tuesday and U.S. oil topped $70 for the first time in two months as Washington pushed allies to halt imports of Iranian crude, which would constrain global supplies.
The market rallied further in post-settlement trading, after the American Petroleum Institute said U.S. crude inventories fell a surprising 9.2 million barrels, far exceeding the decline of 2.6 million barrels that had been expected. [API/S]
Brent crude LCOc1 gained $1.58 to settle at $76.31 a barrel, while West Texas Intermediate crude CLc1 climbed $2.45 to settle at $70.53. In post-settlement trading, where volumes are small, Brent extended gains to $76.61a barrel, while U.S. crude rose to $70.76 a barrel.
· The United States has told countries to cut all imports of Iranian oil from November and is unlikely to offer any exemptions, a senior State Department official said on Tuesday as the Trump administration ramps up pressure on allies to cut off funding to Iran.
· President Hassan Rouhani promised Iranians on Tuesday the government would be able to handle the economic pressure of new U.S. sanctions amid a second day of demonstrations in protest at financial hardship and a weakening rial.
Reference: Reuters
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