• The dollar was slightly weaker on Tuesday ahead of a Federal Reserve meeting that is widely expected to end with an interest rate hike, as investors already have priced in two more rate increases this year and some in 2019, leaving little room for further currency gains.
The Fed kicked off its two-day meeting, with market participants focussed on the U.S. central bank’s view on the economy as well as its guidance on future tightening. The Fed already has raised rates twice in 2018.
The dollar has benefited from a hawkish rate outlook all year, but has lost steam the last few weeks, as other economies such as the euro zone improved, keeping them closer to a shift to tighter monetary policy.
In afternoon trading, the dollar index was down 0.1 percent at 94.120.
• U.S. consumer confidence unexpectedly rose in September, bringing it closer to levels last seen in 2000, the Conference Board said, underscoring strength in the labor market and the overall economy.
• The euro, on the other hand, rose despite a European Central Bank official downplaying on Tuesday its President Mario Draghi’s comments a day earlier about “relatively vigorous” inflation.
Some analysts said the euro was also supported by signs Italy’s anti-establishment coalition is likely to reach a compromise over its 2019 budget.
The euro was last up 0.2 percent at $1.1771 . It had touched a 3-1/2 month high on Monday after Draghi expressed confidence in euro zone inflation and wage growth.
• Italy’s 5-Star leader Luigi Di Maio told ministers on Tuesday that the 2019 budget targets must account for their key demands, including a minimum income for the poor and unemployed, or it would not win the support of his group in parliament.
• Argentina’s central bank governor unexpectedly resigned on Tuesday in the midst of negotiations with the International Monetary Fund, upsetting President Mauricio Macri’s efforts to restore investor confidence and sending the peso sliding.
• U.S. President Donald Trump and Iranian President Hassan Rouhani exchanged taunts at the United Nations General Assembly on Tuesday with Trump vowing more sanctions against Tehran and Rouhani suggesting his American counterpart suffers from a “weakness of intellect.”
Trump used his annual address to the United Nations to attack Iran’s “corrupt dictatorship,” praise last year’s bogeyman North Korea and lay down a defiant message that he will reject globalism and protect American interests.
• Prime Minister Theresa May signalled on Tuesday that she would prefer a ‘no-deal’ Brexit to the offer currently put forward by the European Union, stressing that Britain needs to see counter-proposals from the EU to move Brexit negotiations forward.
“I’ve always said no deal is better than a bad deal,” May told reporters. “I think a bad deal would be a deal that broke up the United Kingdom,” May said when asked whether a no-deal Brexit was better than one similar to the existing Canada-EU trade deal.
• Canada is not making concessions needed to reach a deal with the United States for a trilateral NAFTA pact and is running out of time before Washington proceeds with a Mexico-only agreement, a top U.S. official said on Tuesday.
• The administration of President Donald Trump recently began increasing the pressure on Canada, urging it to conclude a deal by Sunday or face exclusion from a revised North American Free Trade Agreement.
A spokesman for Canadian foreign minister Chrystia Freeland brushed off the latest remarks from the U.S., saying Canada was not interested in focusing on timelines.
U.S. Trade Representative Robert Lighthizer said there was “some distance” between the two sides on issues such as access to Canada’s dairy market and how best to settle trade disputes.
• Oil prices rose Tuesday on global supply concerns following U.S. sanctions on Iran’s oil exports, with benchmark Brent surging to a four-year high, then retraced gains to settle just slightly higher after U.S. President Donald Trump called again on OPEC to boost crude output.
In a speech before the United Nations, Trump reiterated calls on the Organization of the Petroleum Exporting Countries to pump more oil and stop raising prices. Earlier, oil prices had surged on worries about global supply after U.S. sanctions on Iran’s oil exports take effect Nov. 4. Brent LCOc1 hit $82.55 per barrel, its highest since Nov. 10, 2014.
Brent crude futures settled up 67 cents at $81.87 a barrel. U.S. crude futures CLc1 rose 20 cents to $72.28 a barrel, close to the highest since mid-July.
Reference: Reuters
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