· The dollar rose for the first time in five days on Thursday, as risk appetite eased and stocks gave up gains notched early in the week amid nagging concerns about U.S. threats to impose additional tariffs on Chinese imports next month.
Heavy losses in emerging market currencies have also benefited the dollar.
· Bloomberg reported on Thursday that U.S. President Donald Trump told aides he wants to move ahead on a plan to impose tariffs on $200 billion worth of Chinese goods next week.
Reuters is unable to verify the veracity of the report.
The Bloomberg report triggered falls in the offshore Chinese yuan and the Australian dollar, which both fell to a nearly one-week low against the U.S. dollar.
Trump has threatened 25 percent tariffs on $200 billion of Chinese imports because of China’s retaliatory tariffs on $50 billion worth of U.S. products. The U.S. tariffs are expected to take effect in late September after a public comment period ends on Sept. 5.
· “The dollar is clearly benefiting from all these trade tension headlines, but at the end of the day, the market is only focused on the U.S. economy’s solid fundamentals,” said Juan Perez, currency trader at Tempus Consulting in Washington.
“The consistency of the U.S. dollar has been supporting the U.S. dollar all along.”
· In afternoon trading, the dollar index rose 0.2 percent to 94.738.
· The United States and Canada, meanwhile, have expressed optimism that they could reach a new NAFTA deal by Friday, although Ottawa said a number of tricky issues remained.
· Argentina’s peso lost as much as nearly one-fifth of its value on Thursday despite the central bank’s hiking its benchmark interest rate to a dizzying 60 percent as investors panicked over President Mauricio Macri’s handling of an economic crisis.
After the market close, Treasury Minister Nicolas Dujovne pledged to announce a set of new economic measures on Monday, and will target a fiscal deficit for 2019that is lower than the current target of 1.3 percent of gross domestic product in order to reduce the government’s need to go to debt markets.
· U.S. consumer spending increased solidly in July, suggesting strong economic growth early in the third quarter, while a measure of underlying inflation hit the Federal Reserve’s 2 percent target for the third time this year.
· U.S. President Donald Trump is prepared to quickly ramp up a trade war with China and has told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week, Bloomberg News reported on Thursday.
The White House declined comment on the Bloomberg report, which cited six unidentified sources, and deflated markets. The S&P hit session lows, and the U.S. dollar, Chinese yuan and U.S. Treasury yields also fell.
· U.S. President Donald Trump said he respected Federal Reserve Chairman Jerome Powell even though the central bank was not helping him out in trade disputes, Bloomberg News reported on Thursday.
· Top NAFTA negotiators from Canada and the United States increased the pace of their negotiations Thursday to resolve final differences to meet a Friday deadline, with their Mexican counterpart on standby to rejoin the talks soon.
Despite some contentious issues still on the table, the increasingly positive tone contrasted with U.S. President Donald Trump’s harsh criticism of Canada in recent weeks, raising hopes that the year-long talks on the North American Free Trade Agreement will conclude soon with a trilateral deal.
· U.S. trade officials are pressing Mexico and possibly Canada to accept a quota plan to replace national security tariffs currently in place on imports of steel and aluminum, people briefed on the negotiations said on Thursday.
Metals tariffs are not directly part of updating the North American Free Trade Agreement as negotiators race toward a Friday deadline. The United States imposed tariffs on metal imports in March, but at the time exempted Canada and Mexico. It extended the tariffs to both countries in June.
· U.S. President Donald Trump threatened in an interview with Bloomberg News on Thursday to withdraw from the World Trade Organization if “they don’t shape up,” in his latest criticism of the institution.
· Trump has complained the United States is treated unfairly in global trade and has blamed the WTO for allowing that to happen. He has also warned he could take action against the global body, although he has not specified what form that could take.
· President Donald Trump said on Thursday that Attorney General Jeff Sessions was safe in his job at least until the November congressional elections, Bloomberg News reported after interviewing the U.S. leader.
· Trump has repeatedly attacked Sessions for recusing himself from the investigation into Russian interference in the 2016 U.S. presidential election campaign. After the recusal, Deputy Attorney General Rod Rosenstein appointed Special Counsel Robert Mueller to lead the probe, which Trump has called a “witch hunt.”
· The European Union’s detente on tariffs with the United States has not put to rest “profound disagreements” on trade policy, the European commissioner in charge of trade said on Thursday.
In Washington, U.S. President Donald Trump rejected an EU offer to eliminate tariffs on cars and said the EU’s trade policies are “almost as bad as China,” Bloomberg News reported.
Trump agreed in July to refrain from imposing car tariffs while the two sides sought to cut other trade barriers, in a move described then by the European Commission chief as a major concession.
· China reported on Friday that factory activity was higher than expected in August, with the official manufacturing Purchasing Manager's Index (PMI) coming in at 51.3.
The Chinese manufacturing PMI had been forecast to fall to 51.0 in August from 51.2 in July, according to a poll of economists by Reuters.
A reading above 50 indicates expansion, while a reading below that signals contraction.
China's official services PMI for August rose to 54.2 for August against 54.0 in July, the National Bureau of Statistics reported.
· Japan’s industrial output fell 0.1 percent in July from the previous month, down for the third straight month, government data showed on Friday.
The result compared with a median market forecast for a 0.2 percent gain, following a 1.8 percent decline in June.
· Japan’s jobless rate rose slightly in July while the availability of jobs improved, government data showed on Friday.
· Oil prices rose on Thursday to the highest in more than a month, extending gains on growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U.S. inventories.
Brent crude oil LCOc1 rose 63 cents a barrel to settle at $77.77. U.S. crude CLc1 settled 74 cents higher at $70.25 a barrel, after earlier hitting a session high of $70.50. Both contracts were at their highest in more than one month.
Reference: Reuters, CNBC
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