· The dollar held near a two-week high on Monday, shrugging off concerns about weakening global growth and data showing China’s economy slowed sharply in 2018.
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.
Going into 2019, weakness in the dollar was a consensus view among currency market traders. The bet was that the U.S. central bank would stop raising interest rates and the economy would slow after a fiscal boost last year.
The dollar index, which measures its strength against a group of six major currencies, on Monday was steady at 96.33.
The euro was up 0.09 percent at $1.1371 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.
· IMF says the global economic expansion is losing momentum as it cuts growth forecasts
The International Monetary Fund (IMF) revised down its estimates for global growth on Monday, warning that the expansion seen in recent years is losing momentum.
The Fund now projects a 3.5 percent growth rate worldwide for 2019 and 3.6 percent for 2020. These are 0.2 and 0.1 percentage points below its last forecasts in October — making it the second downturn revision in three months.
Speaking at the World Economic Forum in Davos, the IMF’s Managing Director Christine Lagarde said: “After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising. But even as the economy continues to move ahead ... it is facing significantly higher risks.”
At the same time, there’s also been a growth slowdown in emerging economies. The IMF projects a 4.5 percent growth rate in 2019, from 4.6 percent in 2018, before improving to 4.9 percent in 2020.
There are also a number of flashpoints that could lead to even lower growth trajectories across the world, the IMF added in its new report on Monday, released just as the World Economic Forum in Davos, Switzerland kicks off.
“A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given high levels of public and private debt,” it said.
These potential triggers include a “no-deal” Brexit for the U.K. and a deeper-than-envisaged slowdown in China.
· The effect of geopolitics on global growth worries me most, WEF president says
The impact of tumultuous geopolitical affairs on global growth is one of the biggest concerns for the president of the World Economic Forum (WEF).
Speaking to CNBC on the eve of this year’s forum in Davos, Switzerland, WEF President Borge Brende said geopolitical conflicts could damage global growth.
“There are many things that concern me but I would say that those geopolitical conflicts can, if not handled the right way, can have a negative impact on growth,” he told CNBC’s Hadley Gamble on Sunday.
“We’re already seeing a slowing of global growth with the negative impact that will have on a lot of people around the world, also when it comes to creating jobs. We’re not out of the woods when it comes to jobs, for example in Europe many countries are still facing 20 percent youth unemployment,” he noted.
· Theresa May makes last-ditch Brexit bid to win over UK lawmakers
British Prime Minister Theresa May announced tweaks to her much-maligned Brexit deal on Monday, in the hope of winning over lawmakers who overwhelmingly rejected her proposals last week.
A major sticking point to her withdrawal deal is an agreement to ensure no hard border returns between Northern Ireland and the Republic of Ireland. Some Brexiteers feel that "backstop" could be used by Brussels as a means to keep Britain within the EU while the Northern Irish Democratic Unionist Party (DUP) is nervous it would lead to Northern Ireland being treated differently from the rest of the U.K.
In a statement to the lower house of Parliament on Monday afternoon, May said she would now discuss with the DUP on how to allay fears among the people of Northern Ireland before returning to negotiate further with Brussels.
However, May said the prospect of a second Brexit referendum did not enjoy majority support and also rejected the growing calls for her to rule out a "no-deal" Brexit as a possibility.
· May said she would continue to hold further meetings on Brexit next week and hoped that opposition leader Jeremy Corbyn would hold talks with her. Corbyn's response to May's statement was to accuse her of failing to realize the extent of her defeat last week and that her cross-party talks have been a "sham."
British Prime Minister Theresa May sought to break the parliamentary deadlock over Brexit on Monday by proposing to seek further concessions from the European Union on a plan to prevent customs checks on the Irish border.
She told parliament she could not take a “no-deal” Brexit off the table as there was no approved alternative, and the EU would be unlikely to postpone Britain’s exit date - determined by the “Article 50” withdrawal notice - without an exit plan.
She said another referendum would strengthen the hand of those seeking to break up the United Kingdom and could damage social cohesion by undermining faith in democracy.
· The U.K.’s withdrawal from the EU should be put to a second public vote to overcome the current impasse, the former prime minister of Finland told CNBC Monday.
· Oil prices edged up on Monday, reversing earlier losses, as investors shrugged off data that confirmed China’s economic growth is cooling and instead latched on to positive supply-side drivers for the market.
Brent crude oil futures were up 12 cents at $62.83 a barrel by 3:23 p.m. EST versus Friday’s settlement price, while U.S. crude futures were up 19 cents to $53.99 a barrel.
Stock markets are still up so far this month, which has given oil investors more confidence to bet aggressively on a rise in crude prices.
· Analysts said a more robust backdrop for financial markets and the prospect of slower crude production growth were the major drivers behind the rally in oil.
Reference: CNBC, Reuters
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