• The U.S. dollar snapped a five-day losing streak on Thursday and the euro fell, as a new round of U.S.-Chinese punitive trade tariffs boosted the greenback and the annual Federal Reserve conference in Jackson Hole, Wyoming began.
The United States and China escalated their months-long trade dispute, implementing 25 percent tariffs on $16 billion worth of each other’s goods. That boosted the dollar, which has benefited, as a safe-haven investment, from President Donald Trump’s protectionist policies and resulting trade tensions.
• Talks between U.S. and Chinese officials in Washington over trade will continue on Thursday, although most analysts do not expect much headway to be made, with risks growing that the conflict will descend into a growth-sapping tariff war.
• The preliminary talks “look unlikely to yield too much in the way of progress as they enter a second day, with the U.S. president, given his current political difficulties, unlikely to want to concede any further ground,” said CMC Markets analyst Michael Hewson.
• The dollar index .DXY gained 0.24 percent to 95.395, moving off a near three-week low of 94.934 reached overnight.
• The greenback strengthened 0.55 percent against the offshore yuan CNH=, last trading at 6.883 yuan per dollar.
• Fed Chairman Jerome Powell, due to speak on Friday, is expected to signal rate hikes will continue, given 3.9 percent unemployment and inflation that’s now near the Fed’s 2 percent target.
• The euro was down about 0.3 percent at $1.156 EUR=, easing from a two-week high of $1.162.
The single currency was little moved by a widely followed survey showing that the growth of euro zone businesses picked up a touch this month, although not as much as predicted.
• The number of Americans filing for unemployment benefits fell last week, a sign the labor market was holding firm despite tensions between the United States and its trading partners that have led to tit-for-tat tariffs.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 210,000 for the week ended Aug. 18, the Labor Department said on Thursday.
• U.S. economic growth will slow steadily in coming quarters after touching a four-year high in April-June, according to a Reuters poll of economists, who expect President Donald Trump’s trade war to inflict damage.
Boosted in part by $1.5 trillion of tax cuts passed late last year, the U.S. economy expanded at an annualized rate of 4.1 percent in the second quarter, its strongest performance in nearly four years.
The U.S. economy was forecast to grow 3 percent in the current quarter and 2.7 percent in the next, a slight upgrade from the previous poll.
• U.S. and Chinese officials ended two days of talks on Thursday with no major breakthrough as their trade war escalated with activation of another round of dueling tariffs on $16 billion worth of each country’s goods.
“We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship,” White House spokeswoman Lindsay Walters said in a brief emailed statement.
The discussions included “addressing structural issues in China,” including its intellectual property and technology transfer policies, Walters said.
• Implementation of the latest 25 percent tariffs on Thursday did not derail the talks, led by U.S. Treasury Under Secretary David Malpass and Chinese Commerce Vice Minister Wang Shouwen. They were the first face-to-face U.S.-China meetings since early June to try to find a way out of a deepening trade conflict and escalating tariffs.
• China and the United States had a constructive and candid exchange over trade issues, the Chinese commerce ministry said in a statement on its website on Friday.
Chinese officials led by Vice Commerce Minister Wang Shouwen held talks with their U.S. counterparts on Wednesday and Thursday in the United States.
Both sides will keep in touch on the next steps, the commerce ministry said.
• President Donald Trump drew a sharp rebuttal from his attorney general on Thursday after he gave a scathing assessment of Jeff Sessions as being unable to take control of the Justice Department.
Trump intensified his criticism of the Justice Department in a Fox News interview aired on Thursday as the White House grappled to respond to Tuesday’s conviction of former Trump campaign chairman Paul Manafort on multiple fraud counts and guilty plea by Trump’s former personal lawyer, Michael Cohen, that implicated the president.
• Oil prices steadied on Thursday as the escalating trade war between the United States and China weighed on demand expectations a day after prices jumped on a big draw in U.S. crude inventories.
Brent crude oil LCOc1 settled down 5 cents at $74.73 a barrel. U.S. light crude CLc1 was 3 cents lower at $67.83 a barrel.
Reference: Reuters
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