• The dollar fell across the board on Thursday as a resurgence in global risk appetite after the United States and China announced new import tariffs this week that were less harsh than expected curbed safe-haven demand for the greenback.
With news such as recent solid U.S. economic data and a likely rate hike by the Federal Reserve next week priced in, dollar bulls are struggling for other reasons to push the greenback higher, analysts said.
The dollar index against a basket of six major currencies stood at 93.910 after touching 93.829 overnight, its lowest since July 9.
The index has fallen more than 1 percent this week, with investor flows being diverted away from the greenback to its peers such as emerging market currencies amid an ebb in U.S.-China trade war concerns.
The euro was also a beneficiary of the shift currency flows. The single currency was steady at $1.1777 after climbing 0.9 percent the previous day, when it had scaled a three-month peak of $1.1785.
The dollar stood at 112.48 yen after advancing overnight to a two-month high of 112.585.
• The Trump administration imposed sanctions on the Chinese military on Thursday for buying fighter jets and missile systems from Russia, in breach of a sweeping U.S. sanctions law punishing Moscow for meddling in the 2016 U.S. election.
The U.S. State Department said it would immediately impose sanctions on China’s Equipment Development Department (EDD), the branch of the Chinese military responsible for weapons and equipment, and its director, Li Shangfu, for engaging in “significant transactions” with Rosoboronexport, Russia’s main arms exporter.
• The main risks to the stability of the Mexican financial system include escalating trade tensions and faster-than-expected U.S. rate hikes, the country’s financial stability board said on Thursday.
The board, which includes members of the Mexican central bank and the finance ministry, also said that any worsening of macroeconomic imbalances in some emerging market economies also harbored risks if they sparked a contagion that hit growth.
• Canada and the United States showed scant sign on Thursday of closing a deal to revamp NAFTA, and Canadian officials made clear Washington needed to withdraw a threat of possible autos tariffs, sources said.
The administration of U.S. President Donald Trump wants to be able to agree a text of the three-nation North American Free Trade Agreement by the end of September, but major differences remain.
Canada says it does not feel bound by the latest deadline. Asked whether time was running out, Freeland said her focus was getting a deal that was good for Canadians.
• From next year, the European Central Bank will need to communicate the expected path of interest rates beyond its initial hike to keep market prices consistent with a slow rise in inflation, ECB chief economist Peter Praet said on Thursday.
European Union leaders will push for a Brexit deal next month but warned Prime Minister Theresa May on Thursday that if she will not give ground on trade and the Irish border by November they are ready to cope with Britain crashing out.
• North Korea’s Kim Jong Un wants a second summit with U.S. President Donald Trump soon to hasten denuclearization, but a key goal is declaring an end this year to the 1950-53Korean War, the South’s President Moon Jae-in said on Thursday.
• The United States said it was ready to resume talks with North Korea after Pyongyang pledged on Wednesday to dismantle its key missile facilities and suggested it would close its main Yongbyon nuclear complex if Washington took unspecified actions.
• Job growth in South Korea will remain weak for the rest of this year as a boost in fiscal spending won’t be enough to quickly offset employment losses in service industries and the private sector, the finance minister said.
• Japanese manufacturing activity grew at a slightly faster pace in September as domestic and export orders picked up, but business confidence fell to the lowest in nearly two years amid global trade tensions, a private survey showed on Friday.
The Flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) rose to 52.9 in September on a seasonally adjusted basis from a final 52.5 in August.
But a sub-index measuring expectations for future output fell to a preliminary 55.9, the lowest sentiment reading since November 2016, from a final 57.1 in August.
• Japan’s annual core consumer inflation ticked up slightly in August but remained distant from the central bank’s 2 percent target, suggesting that monetary policy will stay ultra-loose for the time being.
• Oil prices eased on Thursday, pulling back after U.S. President Donald Trump urged OPEC to increase production at its meeting in Algeria, and slowing bullish momentum that had previously propelled the market toward four-year highs.
Brent crude oil LCOc1 settled down 78 cents at $78.70 a barrel. U.S. light crude CLc1 was down 32 cents to settle at $70.80 a barrel after rising nearly 2 percent on Wednesday.
Global benchmark Brent has been trading just below $80 a barrel, near its highest level in almost four years, on expectations that U.S. sanctions against Iran, OPEC’s third biggest producer, will reduce global supply.
Reference: Reuters
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