· The dollar gained ground against a currency basket on Thursday, while Russia’s rouble tumbled on sanctions fears and the New Zealand dollar hit two year lows on a dovish sounding central bank statement.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.13% to 95.08 by 03:18 AM ET (07:18 AM GMT).
The dollar was little changed against the yen, with USD/JPY at 111.02 after falling as low as 110.71 overnight ahead of expected bilateral trade talks between the U.S. and Japan in Washington later in the day.
The euro slid against the dollar, with EUR/USD down 0.19% to 1.1588.
Meanwhile, the U.S. dollar jumped to its highest level against Russia’s rouble in two years, with USD/RUB surging 1.68% to 66.6500. Russia’s currency was pressured lower by fears over the prospect of fresh U.S. sanctions.
China’s yuan slid against the dollar, with the currency, which is usually closely controlled by Beijing, at 6.8287 in offshore trading.
· China’s factory price inflation cooled in July but not as much as expected, amid a wider slowdown in economic growth as Beijing remains locked in a heated trade dispute with Washington.
However, consumer inflation picked up from the previous month, largely due to a rise in non-food prices, official data showed on Thursday.
While policymakers are watching price pressures, the central bank is likely to give priority to policies that help shore up the slowing economy.
The producer price index (PPI) — a gauge of factory gate inflation — rose 4.6 percent in July from a year earlier, compared with an acceleration to 4.7 percent in June, according to the National Bureau of Statistics (NBS).
The consumer price index (CPI) rose 2.1 percent from a year earlier, beating expectations of 1.9 percent which was unchanged from June’s growth, but still within the government’s comfort zone of 3 percent.
On a month-on-month basis, the CPI rose 0.3 percent.
· The Trump administration will punish Russia with sanctions for poisoning an ex-spy living in Britain with a chemical weapon, the State Department said Wednesday.
Russia's currency, which was already facing its worst day against the U.S. dollar since April, sank even further after the sanctions were announced. The dollar touched its highest level against the ruble since November 2016.
· According to the latest Reuters poll of economists, a third of economists believe the Bank of Japan’s (BoJ) latest action to make its policy more flexible indicate it is preparing for an eventual exit from its ultra-lose monetary policy, although the exit is unlikely to happen any time soon.
· Crude oil melted about $2.5 this Wednesday as it broke below the $67.00 psychological level and the swing low at $66.92 a barrel. This is the worst daily decline since July 16.
Bears objective is to breakout below 66.30, July 18 low in order to open the gates towards June 18 low at 62.74.
Crude oil bulls objective is to create a double bottom with July 18 low at 66.30. While in the short-term bulls have a fair chance to support the market, it remains to be seen how long they can sustain it. As of now, the overall picture suggests that a break below 66.30 is virtually bound to happen at some point.
· Oil prices rebounded on Thursday after heavy losses in the previous session that came as the China-U.S. trade dispute escalated, with official Chinese data indicating energy demand in the world's top importer has yet to recover its strength.
Brent crude futures were up 24 cents, or a third of a percent, at $72.52 a barrel by 0355 GMT, following a decline of more than 3 percent on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures had gained 7 cents to $67.02 a barrel, after dropping 3.22 percent the previous session.
Reference: Reuters
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