• The U.S. dollar rose toward a 16-month high against the euro on Friday as falling equity prices spurred a flight to quality and the U.S. Federal Reserve reaffirmed its monetary tightening stance, citing the strong U.S. economy.
The S&P 500 fell more than 1 percent, with shares of large technology, industrial and material companies taking a hit as weak Chinese data and a slide in oil prices raised concerns about global growth.
Against the backdrop of a multi-billion dollar trade dispute between Washington and Beijing, Chinese data showed producer inflation fell for the fourth straight month in October on cooling domestic demand and manufacturing activity, while car sales fell for a fourth consecutive month.
The dollar has benefited as rising U.S.-China trade tensions boosted demand for safe-haven investments, pushing the offshore Chinese yuan toward 7 per dollar and the euro toward $1.13.
• The dollar index, which tracks the currency against six major peers, traded as high as 97.01 on Friday, not far from a 16-month peak of 97.2 touched on Oct. 31.
The euro last traded at $1.133, down 0.26 percent.
In Japan, where interest rates are expected to stay extremely low, the yen is near a five-week low against the dollar, last at 113.75 yen, and has fallen 1.6 percent over the last 10 trading sessions.
Sterling extended its losses on Friday after Jo Johnson, a junior transport minister, resigned from UK Prime Minister Theresa May’s government, citing her “delusional” Brexit plans, and called for another referendum on Britain’s EU membership. The currency was down 0.54 percent at $1.297 from around $1.304 before the announcement from Johnson.
• Italy’s economy minister is looking to revise down the budget’s growth forecast for next year to try to reach a deal with the European Commission over fiscal policy, a government source said on Sunday.
The Commission gave Rome until Tuesday to present a new budget and could start disciplinary steps against Rome later this month.
In its latest multi-year economic targets, in early October, Italy revised up its growth forecasts, with 2019 gross domestic product growth estimated at 1.5 percent.
• Prime Minister Theresa May will say on Monday Britain is “open to a different relationship” with Russia if Moscow takes a new path and stops “attacks” that undermine international treaties and security.
• Argentina’s shrinking economy will bottom out in the first three months of next year and start to recover in the second quarter, an International Monetary Fund official said on Saturday.
The revamped IMF agreement calls on the Macri government to deepen spending cuts and raise taxes to bring the primary fiscal deficit, projected at 2.7 percent of gross domestic product in 2018, to zero next year.
• Oil prices fell nearly 1 percent on Friday as global supply increased and investors worried demand growth could slow, pressuring U.S. crude to its longest stretch of daily declines since 1984.
Crude futures benchmarks have slid about 20 percent or more since peaking in early October.
Benchmark Brent crude LCOc1 futures fell 47 cents, or 0.7 percent, to settle at $70.18 a barrel. During the session Brent fell below $70 a barrel for the first time since April, as much as 20 percent off four-year highs reached in October.
Brent slumped about 3.6 percent for the week and more than 15 percent this quarter.
U.S. crude fell for the 10th straight day, the longest such streak since July 1984, according to Refinitiv data.
U.S. West Texas Intermediate crude futures CLc1 declined 48 cents, or 0.8 percent, to settle at $60.19 a barrel. The session low was an eight-month bottom at $59.26, down more than 22 percent from its October peak. That decline puts U.S. crude in “bear market” territory using a stock market definition.
Reference: Reuters
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