The pound jumped 0.9 percent to as high as $1.2881 GBP=D3, sending the currency to a five-day high.
The Euro is trading up almost 0.5% at around 1.1360, rising up in tandem after the Brexit deal on financial services boosted Sterling. The US-China trade deal drags on with no resolution with bears exhausted after a winning streak.
The U.S. dollar index that tracks the greenback against a basket of other currencies inched down 0.1% to 96.70. The dollar traded near 16-month highs on Wednesday after data showed the private payrolls grew by 227,000 for the month, above the 218,000 seen in September and economists’ forecasts of 189,000.
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Currently, the EUR/USD is trading at 1.1341, having clocked a low of 1.1302 earlier today.
The recovery could be associated with the bullish divergence of stochastic on the hourly chart and could be extended further to 1.1397 - a level which marks the confluence of the downward sloping50-candle EMA on 4-hour and the descending trendline connecting Oct. 16 high and Oct. 22 high.
A convincing break above 1.1397 is needed to confirm a temporary bottom has been made at 1.1302 and could yield a stronger corrective rally to 1.1433 (Oct. 19 low).
A close below 1.13 would accentuate the bearish pressure around the EUR. The pair closed yesterday below the 50-month SMA, which is a bearish development.
• Chinese factory activity expanded sightly in October despite an ongoing trade dispute with the U.S., a survey of small and medium-sized enterprises in China showed.
On Thursday, Caixin and IHS Markit reported October Purchasing Managers' index (PMI) was 50.1 for October, beating analysts' expectations. Analysts polled by Refinitiv had expected the reading to have dipped slightly to 49.9 from 50.0 in September.
• Five Republican senators have asked the Trump administration to suspend talks to transfer U.S. nuclear technology to Saudi Arabia following the killing of journalist Jamal Khashoggi at the kingdom's consulate in Turkey.
In a letter to President Donald Trump, the senators say the slaying of Khashoggi, as well as other foreign policy issues, raise questions about whether the Saudi leadership should be entrusted with U.S. nuclear technology and know-how.
• China will step up monetary policy support for rural areas and encourage local firms to raise funds in the capital markets, said a central bank vice governor, pledging that Beijing will help facilitate funds to reach the rural economy.
China’s rural economy - comprising small farm holdings and low-end industries - is in particular need of policy support, with local populations rapidly greying, productivity slumping and few growth engines in sight.
• China is planning more tax cuts to help spur domestic consumption, Vice Finance Minister Zou Jiayi told Reuters on Thursday.
The finance ministry has pledged a more active fiscal policy to help bolster China’s slowing economy.
• British Prime Minister Theresa May has struck a tentative deal with the European Union that would give UK financial services companies continued access to European markets after Brexit, the Times reported on Thursday.
British and European negotiators have reached tentative agreement on all aspects of a future partnership on services, as well as the exchange of data, the British newspaper reported, citing government sources.
The services deal would give UK companies access to European markets as long as British financial regulation remained broadly aligned with the EU’s, the Times reported.
• Japanese manufacturing activity expanded at the fastest rate in four months in October as new export orders returned to growth, a business survey showed on Thursday, in a sign the economy is showing some resilience to global trade frictions.
• A no-fly zone and a ban on military drills near the heavily fortified border between North and South Korea came into effect on Thursday as the once uneasy neighbors push to further defuse tensions.
• Chinese authorities will defend the yuan from weakening past the psychological 7 per dollar rate, very close to where it is trading now, according to a Reuters poll of FX strategists who said the currency will cut its losses in the coming year.
Still, 28 of 60 strategists polled from Oct 26 to 31 forecast the partially-managed yuan to weaken to 7 to the dollar or further at some point within a year, the highest count in Reuters polls since July last year and seven more than in the October poll.
• "If I had a magic wand, I would raise taxes and cut retirement spending," Yellen told CNBC's Steve Liesman at the Charles Schwab Impact conference in Washington, D.C., who characterized the U.S. debt path as "unsustainable."
Yellen noted this will only get worse as more baby boomers retire and spending on retirement and health care programs grow.
• Oil prices fell on Thursday, extending losses in previous sessions, amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown.
Brent crude futures for January had dropped 37 cents, or 0.49 percent, to $74.67 per barrel by 0527 GMT. West Texas Intermediate (WTI) crude futures declined 29 cents to $65.02 a barrel.
Both benchmarks posted their worst monthly performance since July 2016 on Wednesday, with Brent falling 8.8 percent for October and WTI dropping 10.9 percent.
Thursday’s drops came after U.S. Energy Information Administration data showed crude oil inventories climbed for a sixth straight week.
Reference: Reuters, CNBC
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