• The dollar climbed for a second straight session on Friday as investors sought the safety of the U.S. currency after reports that the United States and Canada ended trade negotiations without any deal.
The greenback is on track to end the month of August on a positive note, up about 0.6 percent amid trade tensions. It has advanced in four of the last five months, gaining nearly 9 percent in that period.
• “The trade-positive news in the beginning of the week with the U.S.-Mexico deal has turned, and has become trade-negative,” said Alfonso Esparza, currency strategist at OANDA in Toronto.
“Now we’re seeing resistance on the Canada front with respect to NAFTA. Negotiations have concluded, but nothing has been decided so there’s a little bit of uncertainty. That has created a risk-averse environment, which has benefited the dollar.”
• In late afternoon trading, the dollar index was up 0.4 percent at 95.106 .DXY.
The Canadian dollar fell 0.7 percent versus the U.S. dollar at 76.49 U.S. cents CADUSD=R.
• The euro was also hit by Trump’s comments saying that the European Union’s proposal to eliminate auto tariffs was “not good enough.” Investors were fearful about Europe’s outlook as Trump has threatened to impose tariffs on cars assembled by German automakers.
The single currency was last down 0.6 percent at $1.1601 EUR=, after losing about 0.3 percent overnight, pressured by a rise in Italian government bond yields.
• Emerging market currencies fell. The Argentinian peso ARS=RASL, the world's worst-performing currency this year, was down about 1 percent against the dollar, which last traded at 38.00 pesos. On Thursday, the Argentine peso tumbled 10 percent, bringing month-to-date losses to 27 percent.
• U.S. and Canadian officials on Friday concluded a round of talks on the North American Free Trade Agreement, a Canadian official said. The Canadian government will later in the afternoon announce the results of the talks.
The Wall Street Journal reported that U.S. President Donald Trump will tell Congress of plans to proceed with just the U.S.-Mexico trade deal.
• U.S. President Donald Trump said on Saturday there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the trade negotiations or he would terminate the trilateral trade pact altogether.
Trump on Friday notified Congress of his intent to sign a bilateral deal with Mexico, after contentious talks with Canada ended on Friday without a deal to revamp NAFTA. Trump had unveiled a deal with Mexico on Monday.
• China is still determined to reform and wants to work with all parties to build an open world economy, Chinese President Xi Jinping said on Sunday, reiterating Beijing’s message amid a bitter trade war with Washington.
• Japanese Prime Minister Shinzo Abe expressed confidence in improving ties with China and said the countries’ relationship had returned to a “normal track”, in a newspaper interview published on Sunday.
Abe, who is expected to visit China at the end of October, was also quoted as saying he hoped to invite President Xi Jinping to Japan in the futures.
• Kuwait’s ruler will travel to Washington on Monday for a working visit and hold talks with U.S. President Donald Trump, the state news agency KUNA announced on Sunday.
The White House said in a statement the leaders would discuss trade, investment and security cooperation in their Sept. 5 meeting.
• Singapore’s trade minister said on Saturday that broad agreement on the world’s biggest trade deal should be reached at a summit of leaders from participating nations in the city-state in November, six years since talks began.
Called the Regional Comprehensive Economic Partnership (RCEP), the trade accord includes the 10 members of the Association of Southeast Asian Nations (ASEAN), Australia, India, Japan, South Korea, New Zealand and the world’s No.2 economy, China.
The deal does not include the United States, which is locked in a trade spat with China and pulled out of another broad, international trade agreement in 2017 called the Trans-Pacific Partnership (TPP). The White House said on Friday that U.S. President Donald Trump would skip the November gathering of leaders in Singapore.
• Japanese manufacturing activity expanded in August at a slightly faster pace than the previous month as new orders accelerated, but a decline in export orders may raise concerns about the impact of trade protectionism.
The Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 52.5 in August from a final 52.3 in July.
• Thousands of people across Russia joined protests on Sunday against government plans to raise the pension age, despite recent promises by President Vladimir Putin to soften the unpopular measure.
• Oil prices slipped on Friday, pressured by renewed concerns that a global trade war could dent energy demand, although impending U.S. sanctions on Iran and falling Venezuelan output limited the decline.
Benchmark Brent crude oil LCOc1 fell 35 cents to settle at $77.42 a barrel. U.S. crude CLc1 slipped 45 cents to settle at $69.80.
Brent closed the month 4.3 percent higher while U.S. crude gained 1.5 percent. Oil has been buoyed by tumbling Venezuelan output and declining shipments from Iran ahead of the imposition of U.S. sanctions on Tehran in November.
Reference: Reuters, Wall Street Journal
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