• The euro rose to a more than a three-month high against the dollar on Monday after European Central Bank chief Mario Draghi said he sees a vigorous pickup in euro zone inflation, backing moves towards unwinding an ECB asset purchase programme meant to stimulate the economy.
The single currency has been on an uptrend the last few weeks, bolstered by generally solid European economic data. Over the last 10 days, the euro has risen 2.5 percent versus the greenback.
In afternoon trading, the euro rose 0.1 percent against the dollar to $1.1755. It rose as high as $1.1815, a 3-1/2-month peak.
• While annual rates of harmonized European inflation are tipped to sit at around 1.7 percent until 2020, the ECB projects core inflation, excluding food and energy, to reach 1.8%in the same year.
• Against the yen, the dollar was up 0.1 percent at 112.65 yen. The dollar index was last little changed at 94.192.
• In European equities markets, the benchmark index for euro zone blue chip stocks retreated nearly 0.6 percent.
• The dollar briefly slipped against the yen after some media said U.S. Deputy Attorney General Rod Rosenstein was headed to the White House amid reports he had offered to resign in anticipation of being fired by President Donald Trump.
Rosenstein, who oversees the special counsel investigation into Russia’s role in the 2016 U.S. presidential election, will meet with Trump on Thursday to discuss whether Rosenstein will stay in his job.
• The market is forecasting a Fed rate hike this week, another in December and two to three more next year, which is roughly in line with Fed policymakers’ own projections. Analysts said only unexpectedly strong data would change those market bets.
• Natwest Market analysts believe a large majority at the Fed will see another rate hike in December as appropriate. In 2019, most will favour three hikes, followed by just one in2020, they added.
• The United States and China imposed fresh tariffs on each other’s goods on Monday as the world’s biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to knock global economic growth.
Soon after the fresh duties went into effect, China accused the United States of engaging in “trade bullyism” and said it was intimidating other countries to submit to its will through measures such as tariffs, the official Xinhua news agency said.
But Beijing also said it was willing to restart trade negotiations with the United States if the talks are “based on mutual respect and equality,” Xinhua said, citing a white paper on the dispute published by China’s State Council.
• The European Union and the United States are still in exploratory talks about how they can pursue a limited trade agreement, with no real negotiations yet started, EU Trade Commissioner Cecilia Malmstrom said on Monday.
Malmstrom told reporters on the sidelines of the United Nations General Assembly that the two sides are looking at facilitating sales of U.S. liquefied natural gas to Europe and reducing regulatory barriers to trade.
• U.S. President Donald Trump and South Korean President Moon Jae-in signed a free trade agreement on Monday that Trump hailed as a “historic milestone in trade.”
• Global Benchmark Brent crude jumped more than 3 percent on Monday to a four-year high above $80 a barrel after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by U.S. President Donald Trump for action to raise global supply.
Brent crude LCOc1 settled up $2.40 or 3.1 percent at $81.20 a barrel, after touching an intraday high of $81.39, the highest since November, 2014. U.S. light crude CLc1 settled up $1.30, or 1.8 percent, higher at $72.08.
Reference: Reuters, CNBC
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