· The dollar recovered against its rivals on Thursday as caution before a G20 meeting prompted investors to buy back the currency after comments by the Federal Reserve chief were seen as a sign that a rising trend in U.S. rates may be coming to a close.
The G20 summit on Friday and Saturday is shaping up as a key event for markets given that U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to discuss contentious trade matters after months of tensions between the world's two biggest economies.
Against this backdrop, risk appetite was likely to remain subdued and benefit the safe-haven dollar, analysts said.
· "If we were to see a significant improvement in the outlook for trade wars over the weekend, that combined with a more dovish Fed would boost risk appetite and we could see a flow back out of dollars into risk assets," said Jane Foley, a senior currency strategist at Rabobank.
· The dollar index, which measures the value of the greenback against a basket of other major currencies, was last at 96.79, up about 0.4 percent from almost one-week lows hit earlier.
· And while expectations of Fed rate increases have declined to around 47 basis points over the next year from 52 basis points earlier this week, market expectations for a rise in euro zone rates have also fallen on weak data.
Money markets price in just over a 70 percent chance of a rate rise from the European Central Bank by the end of 2019, down from100 percent earlier this month.
The euro fetched $1.1388, up 0.19 percent on the day. Earlier, it touched $1.1398 - its highest in almost a week. The dollar was down0.25 percent at 113.4 yen, but off the day's lows of 113.21.
· Federal Reserve officials teed up a December rate hike at their most recent meeting, but not without misgivings about how trade tensions and corporate debt could impact growth.
Minutes released Thursday from the Nov. 7-8 meeting of the Federal Open Market Committee, which sets interest rates, pointed toward the strong likelihood of another quarter-point adjustment in the central bank's benchmark rate target next month.
That's in line with market thinking despite the recent volatility.
"Consistent with their judgment that a gradual approach to policy normalization remained appropriate, almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations," the minutes stated.
However, the meeting summary also noted some concern about the "timing" of rate hikes. Current projections indicate that in addition to the December move, the FOMC is likely to approve three more hikes in 2019.
· President Donald Trump told reporters Thursday he was "close" to doing something on trade with China.
He made the remarks as he prepared to depart for the G-20 summit meeting of world leaders in Argentina.
"I will tell you that I think China wants to make a deal, I'm hoping to make it a deal but, frankly, I like the deal we have right now."
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· President Donald Trump on Thursday abruptly canceled his meeting with Russian leader Vladimir Putin at this weekend's G-20summit in Argentina.
Trump in two tweets blamed the cancellation of Saturday's expected encounter with Putin on the failure of Russia to return three ships and their sailors seized from Ukraine last weekend in the Black Sea.
· President Donald Trump and Russian President Vladimir Putin need to meet to discuss the Intermediate-Range Nuclear Forces (INF) treaty, a Russian diplomatic source said on Thursday, after Trump abruptly canceled bilateral talks with Putin at this week’s G20summit in Argentina.
The Kremlin regrets U.S. President Donald Trump’s decision to cancel a meeting with Russian President Vladimir Putin in Argentina and said Moscow is ready for contact with Trump, RIA news agency cited spokesman Dmitry Peskov as saying on Friday.
Trump on Thursday said he was cancelling a planned meeting with Putin at the G20 summit, citing the crisis in Ukraine.
· The Trump administration, which has had sometimes strained relations with high-technology companies, will meet with top tech executives next week to discuss innovation and future jobs, several companies attending and a White House official said on Thursday.
Chief executives expected to participate include Microsoft Corp’s Satya Nadella, Alphabet Inc’s Sundar Pichai, Qualcomm Inc’s Steven Mollenkopf and Oracle Corp’s Safra Catz, a White House official confirmed. Others have been invited but not yet confirmed they will attend the roundtable discussions.
· Growth of U.S. home prices will slow sharply next year along with economic momentum, according to a Reuters poll of property experts who largely said turnover in the housing market has peaked.
The poll, a survey of 35 property market analysts from Nov. 16 to Nov. 26, showed U.S. house price growth is still expected to outpace inflation and pay growth over the next two years, but at a sharply lower rate than found in an August survey.
· British Prime Minister Theresa May will tell world leaders on Friday that the Brexit agreement she has reached with the European Union will have positive consequences for the global economy.
The deal would see Britain leave the bloc in March with continued close trade ties, but she now faces an uphill struggle to get it approved by a deeply divided British parliament.
· Japan’s industrial output rose 2.9 percent in October, reversing the prior month’s decline caused by natural disasters, government data showed on Friday, in a sign factory activity is on track for recovery.
· U.S. crude futures ended Thursday's session up $1.16, or 2.3 percent, at $51.45 a barrel, after earlier dropping to $49.41. Brent crude futures rose 75 cents, or 1.3 percent, at $59.51 a barrel, off an earlier session low of $57.50.
Oil reversed course and rose as much as 3 percent on Thursday, after industry sources said Russia had accepted the need to cut production, together with OPEC ahead of its meeting next week.
Prices, however, were still set for its biggest one-month fall in November since the depths of the financial crisis in 2008, having lost about 22 percent so far.
Reference: CNBC, Reuters
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