· The dollar tumbled from two-week highs on Wednesday after Federal Reserve Chairman Jerome Powell said that interest rates are just below neutral, raising expectations that the U.S. central bank is closer to the end of its rate hike cycle.
Minutes from the Fed's Nov. 7-8 meeting, to be released on Thursday, will next be evaluated for further indications of how many more times the U.S. central bank is likely to hike interest rates.
Investors are also focused on the G20 summit in Buenos Aires on Friday and Saturday, where Trump and his Chinese counterpart, Xi Jinping, are scheduled to discuss contentious trade matters.
Sterling saw brief losses after the Bank of England warned that Britain risks a bigger hit to its economy than during the global financial crisis a decade ago if it leaves the European Union in a "disorderly" manner, which would include a 25 percent decline in the value of the British pound.
· Fed Chair Powell says gradual rate path is designed to balance risks Fed Chair Powell says gradual rate path is designed to balance risks
Federal Reserve Chairman Jerome Powell said Wednesday he considers the central bank's benchmark interest rate to be near a neutral level, an important distinction from remarks he made less than two months ago.
"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth," Powell told The Economic Club of New York in a speech being closely watched in what has become a volatile financial marketplace.
The fed funds rate, which is tied to most forms of consumer debt, currently is in a target range of 2 percent to 2.25 percent. Markets broadly expect another quarter-point hike in December, but there's been a wide disparity between investors and the Fed on where rates should head in 2019. Traders currently have just one increase priced in, whereas Fed officials in their most recent projections point to three.
"While FOMC participants' projections are based on our best assessments of the outlook, there is no preset policy path," he said. "We will be paying very close attention to what incoming economic and financial data are telling us. As always, our decisions on monetary policy will be designed to keep the economy on track in light of the changing outlook for jobs and inflation."
· U.S. President Donald Trump said on Wednesday that new auto tariffs were “being studied now,” asserting they could prevent job cuts such as the U.S. layoffs and plant closures that General Motors Co (GM.N) announced this week.
Trump said on Twitter that the 25 percent tariff placed on imported pickup trucks and commercial vans from markets outside North America in the 1960s had long boosted U.S. vehicle production.
· Japan’s retail sales grew the fastest in 10 months in October as consumers shelled out more on fuel, cars, medicines and cosmetics, in a sign firm private consumption is likely to put the economy back on track for growth.
The 3.5 percent annual gain in retail sales in October from a year earlier handily beat the median estimate for a 2.6 percent increase and follows a revised 2.2 percent rise in September.
· Oil prices fell on Wednesday, continuing a recent run of losses, after U.S. crude inventories rose for the 10th week in a row.
The market also remains nervous over whether OPEC-led producing countries will reach an accord next week on output cuts. Saudi Arabia said on Wednesday it would not cut output alone and Nigeria stopped short of committing to a new push to curb supplies.
U.S. West Texas Intermediate crude fell $1.27, or 2.5 percent, to $50.29, the lowest settle price since early October 2017.
Brent crude, the global benchmark, was down $1.05, or 1.7 percent, at $59.16 a barrel by 2:19 p.m. ET.
· Falling oil prices could prompt world leaders to agree on production policy at G-20 summit, analysts say
The heads of the world's 20 largest economies are due to arrive in the Argentinian capital this weekend, where leaders will try to build a consensus on key issues.
It comes a week before a much-anticipated meeting between OPEC and non-OPEC producers in Vienna, Austria, on December 6.
Reference: CNBC, Reuters
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