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• The dollar fell to a more than three-month low against the yen on Thursday, after the Federal Reserve signaled fewer interest rate hikes over the next two years and expressed caution about the U.S. economic outlook.
The dollar index, a measure of the greenback’s value against six major currencies, dropped to a one-month low. Diminished U.S. rate hike expectations lessen the appeal of dollar-denominated assets. Aside from lowering interest rate forecasts, the Fed also reduced growth and inflation expectations next year.
As result, Issa noted that the safe-haven yen will lead G10 currencies in gains against the U.S. dollar. The dollar on Thursday fell to 110.82 yen against the dollar, its lowest since early September, declining for a fifth straight session. It was last down 1.4 percent at 111.13 yen.
In a widely-expected decision, the Bank of Japan on Thursday kept rates steady, maintaining its ultra-loose monetary settings. The dollar also slid 0.8percent against its rivals to 96.263, after earlier dropping to 96.042, its lowest in a month.
In other currency pairs, the euro rose 0.8 percent to $1.1466 building on gains on Wednesday on news that Italy had struck a deal with the European Commission over its contested 2019 budget and some solid trade data this week.
The euro earlier rose to a six-week high versus the dollar.
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• The Philadelphia Fed manufacturing index in December fell to a seasonally adjusted reading of 9.4, from 12.9 in November to reach the lowest level since August 2016.
Any reading above zero indicates improving conditions. Economists polled by MarketWatch expected a 14 reading.
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• The number of Americans filing applications for jobless benefits rose marginally from near a 49-year low last week, suggesting underlying strength in the labor market and broader economy.
Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 214,000 for the week ended Dec. 15, the Labor Department said on Thursday. Claims had dropped to 206,000 in the prior week, close to the 202,000 reached in mid-September, which was the lowest level since December 1969.
• The House voted Thursday to advance a spending bill with money for President Donald Trump’s proposed border wall, further muddying the scramble to dodge a partial government shutdown by Friday.
The chamber approved the measure in a 221-179 vote. It suggests the House can pass the short-term spending legislation in an expected vote later Thursday night.
But the bill, which includes more than $5 billion for the border barrier, likely will not pass the Senate, increasing the chances that funding for seven agencies lapses after the midnight Friday deadline. Senators were told Thursday to prepare for potential votes Friday.
The Senate late on Wednesday passed a different version of the bill and it was unclear whether it would consider the House-passed measure.
• U.S. Representative Kevin McCarthy, a member of the House of Representatives Republican leadership, said on Thursday he believes the House and Senate can resolve an impasse over funding the U.S. government, which would partially shut down on Saturday without an agreement.
• U.S. President Donald Trump on Thursday said border security must be part of legislation to fund the U.S. government, a position that raises the threat of a partial federal shutdown on Saturday.
• U.S. Defense Secretary Jim Mattis abruptly said he was quitting on Thursday after falling out with President Donald Trump over his foreign policies, one day after Trump rebuffed top advisers and decided to pull all U.S. troops out of Syria.
• The Bank of England (BOE) held interest rates steady on Thursday, with the U.K.’s economic outlook highly uncertain less than 100 days before the country leaves the European Union.
• Oil prices plunged to their lowest levels in over a year on Thursday, deepening a sell-off fueled by concerns about oversupply as stock markets slumped on rising U.S. interest rates.
U.S. West Texas Intermediate crude ended Thursday’s session down $2.29, or 4.8 percent, at $45.88, the lowest closing price since July 2017. WTI is now down about 24 percent this year.
Brent crude, the international benchmark for oil prices, fell $2.89, or about 5 percent, to $54.35, its weakest settle since mid-September 2017. Brent has shed nearly 19 percent in 2018.
Reference: CNBC, Reuters, Market Watch
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