• The U.S. dollar edged up against a basket of major currencies on Tuesday as concerns about trade friction between China and the United States prompted some safe-haven buying of the currency.
The dollar index that tracks the greenback against six major currencies was up 0.09 percent at 95.239. It had shed more than 0.2 percent on Monday as the euro and sterling bounced after the European Union chief negotiator Michel Barnier hinted at a possible Brexit deal.
• The euro was underpinned by a decline in Italian government borrowing costs after Economy Minister Giovanni Tria on Monday predicted that yields would drop as the government lays out its eagerly awaited 2019 budget.
The euro initially rose 0.4 percent to $1.16445 before turning lower in early U.S. trading.
• “Weakness is set to remain a recurring theme amid global trade tensions, a broadly stronger dollar and prospects of higher U.S. interest rates,” said Lukman Otunuga, a research analyst at broker FXTM. “With turmoil in Turkey and Argentina triggering contagion fears, appetite for emerging market assets and currencies is likely to continue diminishing.”
• U.S. job openings surged to a record high in July and more Americans voluntarily quit their jobs, pointing to sustained labor market strength and confidence that could soon spur faster wage growth.
Job openings, a measure of labor demand, increased by 117,000 to a seasonally adjusted 6.9 million in July. That was the highest level since the series started in December 2000. The jobs openings rate was 4.4 percent, unchanged from the previous month and an all-time high first touched in April.
While the tightening labor market could boost wage gains, some economists warned that worker shortages could over time negatively impact economic growth. The JOLTS report cemented expectations the Federal Reserve will raise interest rates at its Sept. 25-26 policy meeting. The Fed has raised rates twice this year.
• The U.S. economy is expanding at a 3.8 percent annualized rate in the third quarter, the Atlanta Federal Reserve’s GDPNow forecast model showed on Tuesday, following the August payroll data released last Friday.
This was slower than the 4.4 percent pace calculated by the regional Fed’s forecast program on Sept. 5.
• China told the World Trade Organization (WTO) on Tuesday it wanted to impose $7 billion a year in sanctions on the United States in retaliation for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties.
The request for authorization from the WTO to introduce the sanctions is likely to lead to years of legal wrangling over the case for the penalty and the amount.
China’s request for authorization, published by the WTO, said the latest available data showed it had suffered $7.043 billion in damages annually, and therefore it requested permission to raise trade barriers on U.S. goods to the same amount, as allowed under WTO rules.
• President Donald Trump plans to sign an executive order as soon as Wednesday that will slap sanctions on any foreign companies or people who interfere in U.S. elections, based on intelligence agency findings, two sources familiar with the matter said.
Trump’s decision coincides with intelligence agencies, military and law enforcement preparing to defend the Nov. 6 congressional elections from predicted foreign attacks even as Trump derides a special counsel investigation into Russian interference in the 2016 elections.
• Canada is ready to offer the United States limited access to the Canadian dairy market as a concession in negotiations to rework the North American Free Trade Agreement, two Canadian sources with direct knowledge of Ottawa’s negotiating strategy said on Tuesday.
Canada’s protected dairy industry is one of three sticking points in NAFTA talks between the two countries, along with a system for settling trade disputes and cultural protections for Canadian media firms.
• Oil prices ignored the threat to demand posed by a trade war that could slow economic growth, taking their cue instead from looming U.S. sanctions against Iran’s petroleum industry that could hurt supply.
U.S. crude futures settled up 2.53 percent at $69.25 per barrel and Brent rose 2.18 percent to $79.06.
Reference: Reuters
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