• The dollar rose against most major currencies on Thursday in thin summer trading, as investors bet global trade tensions and a robust American economy would continue to support the U.S. currency.
The greenback has the upper hand over emerging market currencies in a trade war scenario, analysts said, and tariffs may actually narrow the U.S. trade deficit.
The dollar index .DXY was up 0.4 percent at 95.454. It rose to a year-high of 95.652 on July 19 but has since struggled to break much above the 95.5 level.
• Sterling on Thursday continued to slide, hitting $1.2879 following a drop to $1.2854 on Wednesday.
The pound is weakening as investors ramp up bets that Britain will leave the European Union without an agreement with Brussels on their future relationship.
• New U.S. sanctions against Moscow drove down Russia’s ruble, while worries that Turkey was sliding into a full-blown economic crisis battered the lira on Thursday, but global equity markets largely shrugged off the turmoil to edge higher.
The Russian ruble slid 1 percent after Washington said it would impose fresh sanctions because it had determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain, which the Kremlin denies.
The ruble slid to its lowest since late 2016, hitting 66.7099 rubles to the dollar, leaving it after a second day of declines more than 4 percent weaker than it had been late on Tuesday.
• The number of Americans filing for unemployment benefits unexpectedly fell last week, suggesting that a strong economy was helping the labor market weather ongoing trade tensions between the United States and a host of other countries.
Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 213,000 for the week ended Aug. 4, the Labor Department said. Data for the prior week was revised to show 1,000 more applications received than previously reported.
• The U.S. economy is performing “very well” with continued growth clearing the way for one or two more interest rate hikes in 2018, Chicago Federal Reserve Bank President Charles Evans said on Thursday in an interview in which he dismissed earlier worries about weak inflation.
• German companies are increasingly suffering from U.S. President Donald Trump’s policy of sanctions - including those against Iran - and the tariffs he is pursuing in an escalating trade war with China, business associations said on Thursday.
• Japan’s economy is expected to have recovered from a contraction in the first quarter as household spending improved, but trade tensions between Washington and Tokyo loom as a major risk to the country’s exports and investment outlook.
The economy is forecast to have grown 1.4 percent on an annualized basis in April-June. That would follow a 0.6 percent annualized contraction in the previous quarter, which put an end to the best run of growth since the 1980s bubble economy.
• Mexico’s economy minister on Thursday said his team was working hard to strike a deal with the United States on new rules for the auto industry, which could pave the way for Canada to rejoin talks to revamp the North American Free Trade Agreement.
After a second day of meetings with U.S. Trade Representative Robert Lighthizer in Washington, Mexican Economy Minister Ildefonso Guajardo said talks were “advancing” but that it was not clear how long it would take to settle U.S.-Mexico issues before Canada would come back to talks.
• North Korea on Thursday denounced U.S. calls for enforcing international sanctions despite its goodwill moves and said progress on denuclearization promises could not be expected if Washington followed an “outdated acting script.”
North Korea’s foreign ministry said Pyongyang had stopped nuclear and missile tests, dismantled a nuclear test ground and returned the remains of some U.S. soldiers killed in the 1950-53 Korean War.
• Crude prices settled slightly lower on Thursday, extending the previous session’s losses as the escalating China-U.S. trade dispute casts doubt over the outlook for oil demand.
Brent crude futures LCOc1 fell 21 cents to settle at $72.07 a barrel. U.S. crude CLc1 fell 13 cents to $66.81 a barrel.
Reference: Reuters
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