· The dollar fell on Friday from its three-week highs in the previous session, as traders’ focus shifted to the Federal Reserve’s policy meeting next week when the U.S. central bank is expected to leave interest rates unchanged.
· “While the Fed next week may not sound overtly dovish, its tone might emphasize caution and thus do little to alter very low expectations for policymakers to raise rates this year,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
· The Fed raised interest rates four times last year and has signaled it will probably lift borrowing costs twice in 2019, though some central bank officials have said they will be patient in raising rates.
· The dollar index was down 0.85 percent at 95.78, after climbing to a three-week high of 96.676 on Thursday.
· The euro, on the other hand, rebounded on Friday, steadying after a dovish European Central Bank President Mario Draghi failed to alter an already downbeat assessment on the euro zone’s economy. Draghi warned on Thursday that a dip in the euro zone’s economy could be more pronounced than thought a few weeks ago, comments seen as signaling a delay in the bank’s first interest rate hike.
The euro on Thursday weakened broadly on those comments and fell to a two-month low of $1.1286 against the dollar. But on Friday, the single currency recovered, rising 0.95 percent to $1.1412.
· President Donald Trump agreed under mounting pressure on Friday to end a 35-day-old partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a border wall, handing a political victory to Democrats.
But Trump vowed that the shutdown would resume on Feb. 15 if he is dissatisfied with the results of a bipartisan House-Senate conference committee’s border security negotiations, or he would declare a national emergency in order to get the wall money without congressional approval.
“I think we have a good chance” of reaching an agreement, Trump said.
“We’ll work with the Democrats and negotiate and if we can’t do that, then we’ll do a - obviously we’ll do the emergency because that’s what it is. It’s a national emergency,” he said.
Declaring an emergency could allow Trump to circumvent Congress and repurpose funds Congress has appropriated for other purposes in order to build a wall.
· In an unprecedented move, Canadian Prime Minister Justin Trudeau on Saturday said he had fired his ambassador to China, who prompted a political furor with comments about Huawei’s high-profile extradition case.
John McCallum had embarrassed Trudeau’s Liberal government by saying Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou could make a strong argument against being sent to the United States.
Opposition legislators and former ambassadors accused McCallum of unacceptable political interference in an affair which has badly damaged relations between Canada and China.
· Oil prices rose on Friday as political turmoil in Venezuela threatened to tighten crude supply, but concerns over surging U.S. fuel stocks and global economic woes weighed on sentiment.
The United States signaled on Thursday it may impose sanctions on Venezuelan exports after recognizing opposition leader Juan Guaido as interim president this week, prompting President Nicholas Maduro to cut ties with Washington.
But the ongoing U.S.-China trade dispute and broader gloom over world economic growth put a check on prices.
U.S. West Texas Intermediate crude futures ended Friday’s session 56 cents, or 1.1 percent, higher at $53.69 per barrel. WTI fell about 0.2 percent for the week, the first weekly decline in four weeks.
Brent crude oil futures were up 61 cents, or 1 percent, at $61.70 a barrel around 2:20 p.m. ET. Brent has shed about 1.6 percent since Monday and was also on track for its first week of losses in four weeks.
· RBC Capital Markets predicted that U.S. sanctions could nearly double projected output shortfalls from Venezuela.
“Venezuelan production will decline by an additional 300,000-500,000 barrels per day this year, but such punitive measures could expand that outage by several hundred thousand barrels,” it said.
Reference: CNBC
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