• The dollar rose to the highest in nearly two weeks against a basket of currencies on Thursday, as a flare-up in trade tensions between the United States and China drove traders to buy the U.S. currency.
The dollar index, which measures the greenback against a basket of six other currencies, was up 0.51 percent at 95.109, the highest since July 20.
• “Overall, the dollar is stronger today, and most of it seems to be coming on the back of increased trade tensions,” said Charles Tomes, senior investment analyst and trader at Manulife Asset Management in Boston.
• U.S. President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday.
• China on Thursday urged the United States to “calm down” and return to reason.
• China’s offshore yuan, which has been under pressure on worries the months-long trade dispute will hurt its economy, slipped as low as 6.8808 yuan to the U.S. dollar, its weakest since May 2017.
• Investors in the currency market will be looking to July employment data, due on Friday, for the next catalyst for the greenback. According to a Reuters survey of economists, nonfarm payrolls likely rose by 190,000 jobs in July after increasing by 213,000 in June.
• President Trump escalated his trade war with China on Wednesday, ordering his administration to consider more than doubling proposed tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent, as talks between Washington and Beijing remain at a standstill.
• China vowed on Thursday to retaliate if the United States acted on a threat to raise tariffs on the Asian nation’s exports, fueling fears in financial markets that the trade war between the world’s two biggest economies would escalate.
U.S. President Donald Trump on Wednesday instructed his trade officials to look at increasing tariffs to 25 percent from 10 percent on $200 billion in Chinese imports into the United States.
• The number of Americans filing for unemployment benefits rose less than expected last week, pointing to sustained strength in the labor market despite trade tensions.
Other data on Thursday showed new orders of U.S-made goods rose for a second straight month in June, but business spending on equipment appeared to be slowing further.
- Initial claims for state unemployment benefits increased 1,000 to a seasonally adjusted 218,000 for the week ended July 28, the Labor Department said on Thursday. Claims dropped to 208,000 during the week ended July 14, which was the lowest reading since December 1969. Economists polled by Reuters had forecast claims rising to 220,000 in the latest week.
- Factory goods orders increased 0.7 percent, boosted by strong demand for transportation equipment, electrical equipment, appliances and components as well as computers and electronic products, the Commerce Department said on Thursday. Factory orders increased by an unrevised 0.4 percent in May.
• The Trump administration came under pressure on Tuesday from both critics and allies over whether it should proceed with another tax cut for investors and do so without consulting the U.S. Congress.
A White House official confirmed that the U.S. Treasury is looking into the possibility of circumventing Congress to protect gains on capital assets from higher tax bills resulting from inflation. The New York Times reported on Monday that such a move could cut capital gains tax revenues by $100 billion.
• The Bank of England pushed interest rates above their financial crisis lows on Thursday, but signalled it was in no hurry to raise them further as Britain heads for Brexit next year with no clear plan for leaving the European Union.
The BoE’s nine rate-setters unexpectedly voted unanimously to raise rates to 0.75 from 0.50 percent, the level at which they have spent most of the past decade, apart from a period after the 2016 Brexit vote when they were cut even lower.
• U.S. President Donald Trump received a letter from North Korean leader Kim Jong Un as the two continue to discuss Pyongyang’s commitment at a recent Singapore summit to rid itself of nuclear weapons, but no second meeting is currently planned, the White House said on Thursday.
The White House on Thursday said there were no future meetings planned with North Korean leader Kim Jong Un but that President Donald Trump was open to another sitdown.
• Oil prices strengthened Thursday, with U.S. crude gaining nearly 2 percent after traders saw an industry report suggesting domestic crude stockpiles would soon decline again after a surprise rise in the latest week.
Brent crude futures LCOc1 settled up $1.06, or 1.5 percent at $73.45 a barrel. U.S. crude CLc1 rose $1.30, or 1.9 percent, to $68.96 a barrel.
Reference: Reuters, New York Times
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