The greenback has enjoyed its first weekly gain since mid-December, buoyed by hopes for a thaw in U.S.-China trade tensions and stronger-than-expected U.S. industrial production numbers.
The dollar index, which measures its strength against a group of six major currencies, on Monday was steady at 96.308 after climbing to 96.260 percent on Friday, its strongest since Jan. 4.
· “The U.S. dollar is currently benefitting from its role as safe currency haven,” said Esther Maria Reichelt, an FX strategist at Commerzbank in Frankfurt
“The Federal Reserve could cushion a weaker economy with monetary policy measures... protecting the U.S. quite well from weakening global growth and making the dollar the currency of choice,” she added.
· The euro nudged up 0.2 percent to $1.1376 and was headed for its first daily gain in over a week but remained in close reach of a two-week low of$1.1353 brushed on Friday.
The pound was 0.1 percent lower at $1.2860.
· The USD/CNY was up 0.2% to 6.7875 after data from the National Bureau of Statistics showed on Monday that China’s fourth-quarter gross domestic product (GDP) growth eased to 6.4% from 6.5% in the third quarter as expected.
Full-year growth came in at 6.6%, the slowest rate of expansion China has seen since 1990, although it was also in line with expectations.
The People's Bank of China (PBOC) set the yuan reference rate at 6.7774 vs Friday's fix of 6.7665.
The U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.1% at 95.945.
· China on Monday announced that its official economic growth came in at 6.6 percent in 2018 — the slowest pace since 1990.
Although Beijing’s official GDP figures are tracked as an indicator of the health of the world’s second-largest economy, many outside experts have long expressed skepticism about the veracity of China’s reports.
Beijing is trying to balance a crackdown on high debt levels while also maintaining economic growth. While reducing reliance on
Nevertheless, economic data from China are being closely watched for signs of damage inflicted by the trade war with Washington.
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· China’s soybean imports in the opening weeks of 2019 have plunged from recent years, raising concerns for American farmers who were hoping that a trade deal would offer swift relief.
Soybean shipments offloaded in China this year are down about 37 percent from the first two weeks of 2018, according to tanker-tracking firm ClipperData. To be sure, a couple weeks of data represent a small sample size, but the drop is very concerning in light of market conditions and trade tensions, says Ken Smithmier, director of research for agricultural markets at ClipperData.
· U.S. markets will be closed for a long holiday weekend on Monday, while the ongoing government shutdown continues to delay some key U.S. economic reports.
Sino-U.S. trade frictions are expected to remain in focus this month. Chinese Vice Premier Liu He is set to visit the U.S. on Jan. 30 and 31 for a new round of trade talks.
· British Prime Minister Theresa May will on Monday put forward a motion on her proposed next steps. Over the following week, lawmakers will be able to propose alternatives. They will debate these plans on Jan. 29, and voting on them should indicate whether any could get majority support.
· Chances that Japan will slide into a recession this coming fiscal year have grown over the past three months, a Reuters poll of economists found, pressured by a global economic slowdown and U.S.-China trade friction.
Economists said while Japan will probably manage to avoid a recession in the year starting in April, growing 0.8 percent, the outlook is shaky.
That bodes poorly for Prime Minister Shinzo Abe’s plans to raise the sales tax to 10 percent from 8 percent in October to cope with swelling welfare costs as the country’s population ages.
Japan has felt the indirect impact of the U.S.-China trade war because it makes equipment and supplies used by Chinese manufacturers of semiconductors, mobile phones
The latest data showed Japan’s export growth slowed to a crawl in November as shipments to the United States and China weakened sharply.
U.S. President Donald Trump said on Saturday there has been
Uncertainty over Britain’s exit from the European Union adds to the murky outlook, analysts said.
“Uncertainties over the global economy continue such as the outlook of Brexit and impacts from the U.S.-China trade friction on the Japanese economy is materializing, so risks have risen from three months ago,” said Harumi Taguchi, principal economist at IHS Markit.
· Oil prices firmed on Monday after data showed China’s economic slowdown was not as big as some analysts had expected, with supply cuts led by the Organization of the Petroleum Exporting Countries also offering support.
International Brent crude oil futures were at $62.83 per barrel at 0259, up 13 cents, or 0.2 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.92 a barrel, up 12 cents, or 0.2 percent.
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· CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are approaching resistance in the 54.51-55.24 zone, with a daily close above that opening the door for a test of the chart inflection point at59.05. Support is in the 49.41-50.15 region, with a turn back below that paving the way for another challenge of the 42.05-55 area.
Reference: Reuters, CNBC
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