· The dollar fell across the board on Friday, as the latest comments by U.S. President Donald Trump complaining about the strength of the greenback and the rise in U.S. interest rates squashed a rally that took it to a one-year high the previous session.
The U.S. currency extended losses in afternoon trading after CNBC reported that Trump was worried the Federal Reserve will raise interest rates twice more this year.
The dollar index, a measure of its value against a basket of six major currencies, erased three days of gains. Against the yen, the dollar recorded its largest daily fall since February.
The latest report, which cited a White House official, followed Trump’s criticism on Thursday of the Fed’s interest rate policy and the strong dollar, saying that it could hurt the U.S. economy.
Trump earlier told CNBC that a strong dollar put the United States at a disadvantage and he was ready to place tariffs on $500 billion of imported goods from China.
In afternoon trading, the dollar index was 0.77 percent weaker at 94.417, after hitting a one-year high of 95.62 in the previous session. The euro was also higher, up 0.7 percent at $1.1725.
· Trump’s comments on trade pulled the Chinese yuan higher to 6.7784 per dollar in offshore trading. Over the last three months, the yuan has fallen nearly 8 percent against the U.S. dollar.
The People’s Bank of China dropped the midpoint for a seventh straight trading day to 6.7671 per dollar on Friday, or 0.9 percent weaker than the previous fix of 6.7066.
Friday’s fixing was the lowest since July 14, 2017, and represented the biggest one-day weakening in percentage terms since June 27, 2016.
· Speculators raised bullish bets on the U.S. dollar to the largest position since March 2017, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.
The value of the net long dollar position was $18.41 billion in the week ended July 17, up from $16.41 billion the previous week. Speculators were net long dollars for a fifth straight week, after being short for 48 consecutive weeks.
· Japan should be careful about recent remarks by U.S. President Donald Trump on currencies and might need to convince Washington its monetary easing is not aimed at weakening the yen but beating deflation, a finance ministry official said on Saturday.
· U.S. President Donald Trump is not trying to influence currency markets, Treasury Secretary Steven Mnuchin said on Saturday, reiterating that a strong U.S. dollar reflects a strong U.S. economy and is in the United States’ long-term interest.
· U.S. President Donald Trump on Friday said he was ready to impose tariffs on all $500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.
A top Federal Reserve official, meanwhile, warned the trade war could hurt the U.S. economy.
· U.S. President Donald Trump’s tariffs will lead to a drop in prosperity in Germany this year and are likely to cost Germans up to 20 billion euros ($23.44 billion), the head of German think-tank IMK said.
The United States imposed tariffs on EU steel and aluminum on June 1 and Trump is threatening to extend them to EU cars and car parts.
· German industry groups warned on Sunday, before European Commission President Jean-Claude Juncker meets U.S. President Donald Trump this week, that tariffs the United States has imposed or is threatening to introduce risk harming America itself.
Citing national security grounds, Washington imposed tariffs on steel and aluminum imports from the EU, Canada and Mexico on June 1 and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting on Wednesday.
· U.S. Treasury Secretary Steven Mnuchin said on Sunday that G7 industrial powers were taking seriously his call for them to drop tariffs, non-tariff trade barriers and subsidies and added the Trump administration would press these issues in upcoming talks with the European Union’s top executive.
Mnuchin said at the close of a G20 finance leaders meeting that President Donald Trump’s trade stance was not about protectionism but wanting free and fair trade for the United States.
The United States’ removal of tariffs on steel and aluminum imports is not a necessary precondition for trade talks between the United States and the European Union to begin, the European Council representative to the G20Hubert Fuchs said on Sunday.
· U.S. President Donald Trump will showcase American-made products ranging from beef jerky and cowboy boots to the Lockheed Martin Corp F-35 fighter jet on Monday, as his administration wages trade battles on a series of fronts.
A White House spokeswoman said on Sunday that Trump would make remarks at the exhibit designed to demonstrate the administration’s “commitment to ensuring more products are made in America.” Vice President Mike Pence, six Cabinet secretaries and some dozen other senior officials will also attend.
· Global finance leaders called on Sunday for stepped-up dialogue to prevent trade and geopolitical tensions from hurting growth, but ended a two-day G20 meeting with little consensus on how to resolve multiple disputes over U.S. tariff actions.
The finance ministers and central bank governors from the world’s 20 largest economies warned that growth, while still strong, was becoming less synchronized and downside risks over the short- and medium-term had increased.
· Oil prices rose on Friday as a weakening dollar and lower expected August crude exports from Saudi Arabia supported the market, offsetting concerns about U.S.-China trade tensions and supply increases.
The expiring U.S. West Texas Intermediate (WTI) crude for August delivery settled up $1.00 at $70.46 a barrel, while the more liquid September contract rose 2 cents to $68.26 a barrel. U.S. crude ended the week down nearly 1 percent.
Brent crude settled up 49 cents at $73.07 a barrel. Brent fell 3.1 percent in the week.
Reference: Reuters
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