• The dollar ended little changed on Wednesday after reaching a 13-month peak against a basket of currencies as investors briefly added to their safe-haven holdings of the greenback on worries about slowing Chinese growth and Europe’s exposure to Turkey.
Upbeat figures on domestic retail sales, manufacturing output and worker productivity also supported the greenback and the view of steady U.S. economic growth.
The dollar’s initial gains faded as the euro recovered following news that Qatar pledged to invest $15 billion in Turkey. This move is seen supportive of Turkey’s banking system and reduced anxiety about European banks’ exposure in Turkey. It helped euro to rebound from a 13-month trough versus the dollar and Swiss franc.
The ICE index that tracks the dollar against six major currencies was flat at 96.710 in late U.S. trading after rising to 96.984 earlier, the highest since June 2017.
The euro hit $1.13010, the lowest in 13 months before moving up to $1.13430, flat on the day. The single currency was steady at 1.12790 Swiss franc, EBS data showed.
• Sterling reached a 13-1/2 month low versus the dollar despite data showing Britain’s inflation rate picked up in July for the first time this year. It was down 0.2percent at $1.2696.
• The Chinese yuan sagged nearly 0.8 percent to 6.9512 per dollar in offshore trading, hitting its weakest level since January 2017.
The yuan’s latest weakness followed a batch of disappointing economic data earlier this week. That stoked speculation whether the People’s Bank of China would intervene or Beijing would introduce more fiscal stimulus to stem its currency from breaking through the 7-yuan mark.
• The lira has recovered roughly 12 percent to 6.04 per dollar after hitting a record low of 7.24 on Monday. It remained 40 percent lower versus the greenback this year.
Other emerging market currencies stumbled again, with the South African rand losing over 2 percent and the Indian rupee lingering near an all-time low.
• The U.S. economy is growing at a 4.3 percent annualized rate in the third quarter, the Atlanta Federal Reserve’s GDPNow forecast model showed on Wednesday following the release of the July data on retail sales and industrial output.
The model raised its forecast on personal consumption expenditures growth in the third quarter to 3.1 percent from 2.9 percent after the July figures on retail sales.
• U.S. retail sales rose more than expected in July as households boosted purchases of motor vehicles and clothing, suggesting the economy remained strong early in the third quarter.
The Commerce Department said retail sales increased 0.5 percent last month. But data for June was revised lower to show sales gaining 0.2 percent instead of the previously reported 0.5 percent rise. Economists polled by Reuters had forecast retail sales nudging up 0.1 percent in July. Retail sales in July increased 6.4 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales advanced 0.5 percent last month after a downwardly revised 0.1 percent dip in June. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
• U.S. senators agreed on Wednesday to debate and vote in the next few days on more than $850 billion in spending on defense, labor and healthcare programs, as the Trump administration announced its objections to some parts of the bill.
Trump has threatened to shut down the government if Congress, which is controlled by his fellow Republicans, does not adhere to his spending priorities, especially his desire to spend billions of dollars to build a wall on the border with Mexico.
• Mexico’s economy minister on Wednesday said that Mexico and the United States may not meet an August goal to finish bilateral talks to revamp the NAFTA trade deal, which is beset by disagreements over automobile trade rules and other issues.
• Oil futures fell more than $2 a barrel on Wednesday after data showed U.S. crude stockpiles jumped last week, compounding worries about a weaker global economic growth outlook.
Brent crude futures LCOc1 were down $1.96 a barrel at $70.50 a barrel by 11:07 a.m. EDT [1507 GMT]. The contract earlier touched $70.40 a barrel. U.S. crude futures CLc1 fell $2.22 to $64.82 a barrel.
• U.S. crude inventories rose unexpectedly last week USOILC=ECI, climbing 6.8 million barrels in spite of refinery crude runs hitting a record high, the Energy Information Administration’s data showed. Crude stocks at the Cushing, Oklahoma USOICC=ECI, delivery hub for U.S. crude futures rose 1.6 million barrels.
Reference: Reuters
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