· The dollar held firm against a basket of its peers on Monday after U.S. job data reinforced investors’ expectations the Federal Reserve will gradually raise interest rates this year.
The dollar, which measures the greenback against a basket of six other major currencies, was about 0.1 percent higher at 95.259, crawling back to a more-than-one-year peak of 95.652 reached on July 19. Investor attention has shifted to the yuan after the People’s Bank of China on Friday made it more expensive to bet against the currency, which helped it rebound from a near 15-month low against the greenback.
“We’re seeing pretty consistent dollar strength across the board. The theme is there,” said Bart Wakabayashi, Tokyo branch manager at State Street Bank.
“Although Friday maybe didn’t hit the target when it comes to the non-farm payrolls, it was still a positive number. It’s a good and strong number. If you line that up with previous releases, you see a trend,” he said.
The euro was frail after slipping to a 4-1/2-week low against the dollar on Monday.
The single currency traded at $1.1563, near an intra-day low of $1.1557, its lowest level since changing hands at $1.15275 on June 28.
Offshore yuan was 0.14 percent higher on the day, trading at 6.8400 yuan per dollar.
The yen weakened less than 0.1 percent against the dollar to 111.34 yen on Monday.
· The likelihood of a Democratic party takeover of at least one house of the U.S. Congress in the midterm elections in November is prompting some portfolio managers to move more money to cash and rotate away from sectors like financials and technology that could see greater regulatory scrutiny.
Fund managers from Federated Investors, OppenheimerFunds, and BMO Global Asset Management are among those who are repositioning their portfolios and seeing cash as more attractive with the Nov. 6 elections less than 100 days away.
· 'They're protectionist': Fed's James Bullard says other countries won't wipe out tariffs with the US
Countries espousing free trade in response to U.S. trade war threats should just drop all their own tariffs to zero — but they won't, says St. Louis Federal Reserve Bank President James Bullard.
"The positioning here is that the other countries are all free trade and the U.S. is not. If that's really what we're saying then just drop all tariffs and all non-tariff barriers. Go down to zero. That would be better outcome for the whole world," Bullard told CNBC's "Squawk Box Europe" Monday.
"Why is that not going happen? Because they're protecting their industries, that's why it's not going to happen. So, they're protectionist."
· Germany’s hesitancy to reduce its trade surplus is contributing to trade tension and adds to risks that could undermine global financial stability, Maury Obstfeld, chief economist at the International Monetary Fund (IMF), said.
The IMF and the European Commission have long urged Germany to boost domestic demand by lifting wages and investment to reduce what they call global economic imbalances. Since his election, U.S. President Donald Trump has also repeatedly criticized Germany’s export strength.
· German industrial orders plunged by more than expected in June, posting the steepest monthly drop in nearly a year and a half, suggesting that factories in Europe’s largest economy could shift into a lower gear in the coming months.
The Federal Statistics Office said on Monday that contracts for ‘Made in Germany’ goods fell by 4.0 percent after an increase of 2.6 percent the previous month.
· North Korean state media called on Monday for the United States to drop sanctions, saying Pyongyang had demonstrated good faith by ending its nuclear weapons testing and handing over the remains of U.S. troops killed in the Korean War.
The statements came just days after a confidential United Nations report concluded North Korea has not stopped its nuclear and missile programs, in breach of U.N. resolutions, and has continued to conduct illegal trades of oil, coal and other commodities.
· Oil prices rose on Monday after Saudi crude production registered a surprising dip in July and as American shale drilling appeared to plateau.
Many U.S. shale oil drillers posted disappointing quarterly results in recent weeks, hit by rising operating costs, hedging losses and a fall in crude prices away from 2018 highs reached between May and July.
Spot Brent crude oil futures were at $73.42 per barrel at 0653 GMT on Monday, up 21 cents, or 0.3 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 19 cents, or 0.3 percent, at $68.68 barrel.
Reference: Reuters, FXStreet
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