· The U.S. dollar held steady at a six-month high against the Japanese yen and a two-month high against the Swiss franc on Thursday, bolstered by solid inflation data and investor sentiment that the greenback stands to benefit from a trade war.
“(A trade war) is probably good for the dollar,” said Greg Anderson, global head of FX strategy at BMO Capital Markets. That’s because “the U.S. has a trade deficit currency, and so if you find a way to reduce that trade deficit and you have the same financial flows, then all of the sudden, flows are going to be positive for the dollar, at least relative to where they were.”
The dollar/yen rally is in its seventh trading day, with the dollar having broken through the psychologically significant barrier of 112 yen for the first time since Jan. 10 on Wednesday. On Thursday, the dollar hit a fresh six-month high against the Japanese currency of 112.62.
The dollar index, which tracks the greenback against a basket of currencies, stood at 94.889.
The dollar maintained gains made on Wednesday against most major currencies thanks in part to a report of U.S. consumer prices on Thursday which showed a steady buildup of inflation pressure that could keep the Federal Reserve on a path of gradual interest rate increases.
Strong economic data has underpinned the dollar’s recent strength. “(The dollar) has been kept afloat because in quarter one and quarter two the economic indicators across the spectrum were positive,” said Perez.
The eurodollar fell in overnight trade on Wednesday, retracing earlier gains, but maintained levels around $1.167 throughout Thursday.
· The United States and China could reopen talks on trade but only if Beijing is willing to make significant changes, U.S. Treasury Secretary Steven Mnuchin said on Thursday.
China on Thursday said foreign firms operating in China would suffer in a trade war, urging U.S. companies to lobby their government to protect their interests, and said no talks to end the impasse were currently under way.
· U.S. Commerce Secretary Wilbur Ross said in a statement Thursday evening that he would be selling all of his equity holdings and buying Treasury securities with the proceeds.
There're also media reports that revealed that Ross held, or had held, stakes in companies whose fortunes could be affected by U.S. trade policy decisions, with which Ross is intimately involved.
Ross was also found to have taken short positions in stocks including Air Lease and Ocwen Financial Corporation, which he said were "technical ways of disposing the stocks." But such claims had also been criticized.
· U.S. President Donald Trump said on Thursday he was ready to help smaller NATO countries to buy U.S. weapons as he pushed them to spend more on their own defense.
Speaking after a NATO summit, at which he said nations had agreed on new spending pledges, Trump said some less wealthy members had asked during meetings in Brussels if he could help them buy U.S. arms equipment, but did not name the countries.
· U.S. President Donald Trump said a free trade deal with Britain might be impossible if it went ahead with Prime Minister Theresa May’s proposals for post-Brexit ties with the European Union, in a damaging intervention set to further criticism of her plans.
· The United States accused North Korea on Thursday of breaching a U.N. sanctions cap on refined petroleum by making illicit transfers between ships at sea, according to a document seen by Reuters, and demanded an immediate end to all sales of the fuel.
The United States submitted the complaint to the U.N. Security Council North Korea sanctions committee. The charge of a sanctions breach comes as Washington engages North Korea in a bid to convince Pyongyang to give up its nuclear weapons.
The North Korea U.N. mission did not immediately respond to a request for comment on the U.S. accusation. North Korea relies on imported fuel to keep its struggling economy functioning.
The United States said that as of May 30, 89 North Korean tankers had brought in refined petroleum products illicitly obtained in ship-to-ship transfers this year.
· Brent crude strengthened late on Thursday, recouping some of its losses from the previous session, as market focus returned to concerns about spare capacity following a warning from the International Energy Agency (IEA).
Brent crude oil LCOc1 gained $1.05 a barrel to settle at $74.45, rebounding from a session low of $72.67. On Wednesday, the global benchmark slumped $5.46, or 6.9 percent, its biggest one-day fall in two years.
U.S. crude CLc1 settled down 5 cents at $70.33 a barrel, after losing 5 percent the previous session.
· The IEA cautioned the world’s oil supply cushion “might be stretched to the limit” due to production losses in several different countries.
Reference: Reuters, CNBC
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