· The dollar was little changed against a basket of currencies on Monday as traders were cautious about staking new positions ahead of the Federal Reserve’s two-day policy meeting and trade talks between China and the United States.
Safe-haven demand for the dollar dried up as the U.S. government started to reopen after a record long shutdown, and investors were bracing for a slew of economic figures that had been postponed.
The euro reached a 10-day high against the greenback as investors consolidated positions before votes in the British parliament on Tuesday aimed at breaking a Brexit deadlock.
The euro rose to a near two-week peak at $1.1438. It last traded up 0.11 percent at $1.1425. Recent economic readings on Germany and France have been weak and the European Central Bank is expected to remain dovish. Still, traders believe these factors are already priced into the euro.
At 3:16 p.m., the ICE index that tracks the dollar versus the euro, yen, sterling and three other currencies was down 0.04 percent at 95.75. It hit a near two-week low at 95.673 earlier Monday.
Sterling declined following its biggest weekly rise in more than 15 months. With the United Kingdom set to leave the European Union March 29, lawmakers have set votes in parliament on Tuesday over terms for Brexit.
The pound was down 0.33 percent at $1.3158, while the euro was up 0.11 percent at 1.1425.
· U.S. government debt yields slipped on Monday as investors tracked the end of the longest government shutdown in history.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 2.737 percent, while the yield on the 30-year Treasury bond was also lower at 3.048 percent.
· President Donald Trump told the Wall Street Journal on Sunday that another government shutdown is “certainly an option,” expressing skepticism that Congress would reach a deal to fund the border wall he has requested. His comments followed a bill on Friday to end the 35-day shutdown — the longest in history.
Lawmakers will on Tuesday debate and vote on British Prime Minister Theresa May’s response to the overwhelming rejection of her Brexit plan earlier this month.
The vote is not a rerun of the Jan. 15 vote on whether to approve the exit deal she had negotiated with the European Union, which she lost by 432 to 202.
Instead, Tuesday is a chance to discover what sort of changes to her strategy would be required to win the support of parliament, so May can try to renegotiate the deal in Brussels and then ask lawmakers to approve it.
· The European Union has a message for Prime Minister Theresa May as she plots a path out of the Brexit impasse: Britain needs to decide what it really wants but the negotiated divorce deal will not be reopened.
As the Brexit crisis goes down to the line, however, EU officials indicated there might be wriggle room if May came back with a clear, and viable, request for changes that she - and the EU - believe will secure a final ratification.
· The euro zone economy has performed worse than expected in recent months and global uncertainty is weighing on economic sentiment, European Central Bank President Mario Draghi said on Monday, repeating the bank’s recent warnings about growth.
The European Central Bank is ready to use all its policy tools to support Europe’s softening economy, including by restarting a recently shelved bond-buying program, ECB President Mario Draghi said.
The comments, delivered to European lawmakers in Brussels, underscore a new tone of caution from the ECB, which moved only last month to phase out its landmark stimulus policy, a €2.5 trillion ($2.9 trillion) bond-buying program known as quantitative easing or QE.
· Oil prices tumbled on Monday as weak industrial earnings in both China and the United States raised fresh concerns about a global slowdown that could cut fuel demand.
U.S. West Texas Intermediate crude ended Monday’s session down $1.70, or 3.2 percent, at $51.99 a barrel, its lowest closing price in two weeks.
Brent crude, the international benchmark for oil prices, was down $1.71, or 2.8 percent, at $59.93 around 2:30 p.m. ET, slipping below $60 for the first time in nearly two weeks.
· The Trump administration on Monday imposed sweeping sanctions on Venezuelan state-owned oil firm PDVSA, aimed at severely curbing the OPEC member’s crude exports to the United States and at pressuring socialist President Nicolas Maduro to step down.
Minutes before the announcement, Juan Guaido, the Venezuelan opposition leader who proclaimed himself interim president last week with U.S. backing, said congress would name new boards of directors to the company and its U.S. subsidiary, Citgo.
Guaido, supported by the United States and most countries in the Western Hemisphere, says Maduro stole his re-election and must resign to allow new, fair polls.
Reference: CNBC, Reuters, The Wall Street Journal
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