· The euro rose from a three-month low on Thursday as hopes of progress in China-U.S. trade talks lifted risk appetite towards major currencies across the board, with the British pound the only laggard before a parliamentary debate on Brexit.
Even economic data showing Germany's economy stalled in the fourth quarter of 2018 with Italy already in recession failed to pull the euro significantly lower in quiet trading.
The euro was up 0.28 percent at $1.1297. The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.978 after seeing a high above 97.2 yesterday.
· "If we had a negative print on German growth that may have hit the euro but we need to await for more details on his strategy towards the European auto sector before pushing the euro higher," said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets in London.
· Market analysts fear that U.S. President Donald Trump could turn his attention to European imports after China and potentially impose tariffs on European automakers in the coming days.
The United States is the main export destination of European Union cars, well ahead of China, and the impact is significant especially for Germany, which has the biggest value added in exports of cars to the U.S.
Risk appetite grew after China reported dollar-denominated exports rose 9.1 percent in January from a year earlier and imports dropped 1.5 percent.
The strong trade data fueled gains by the Chinese currency in the offshore market. The yuan gained 0.17 percent to 6.7711.
· Bloomberg reported President Donald Trump was considering pushing back by 60 days a March 1 deadline for resolving trade disputes with China, citing people familiar with the matter. On Wednesday, Trump had said the talks were "going along very well."
· President Donald Trump vowed on Thursday to declare a national emergency in an attempt to fund his U.S.-Mexico border wall without congressional approval, a step likely to plunge him into a court battle with Congress over constitutional powers.
Conceding defeat in his demand that Congress provide him with $5.7 billion in wall money, Trump agreed to sign a government funding bill that lacks money for his wall but prevents another damaging government shutdown.
The top Democrat in Congress immediately denounced the president’s move. Asked by reporters if she would file a legal challenge to an emergency declaration, House of Representatives Speaker Nancy Pelosi said: “I may, that’s an option.”
Republican Senate Majority Leader Mitch McConnell said he would support Trump on the emergency declaration. Earlier this month, McConnell cautioned Trump that declaring an emergency could divide Senate Republicans, the Washington Post reported.
· U.S. retail sales unexpectedly fell in December, posting the worst drop in nine years in a sign of slower economic momentum at year-end amid financial market turmoil and the government shutdown.
The value of overall sales fell 1.2 percent from the prior month after a downwardly revised 0.1 percent increase in November, according to Commerce Department figures released Thursday after a four-week delay due to the shutdown. That missed all economist estimates in a Bloomberg survey that had called for a 0.1 percent gain.
Stock futures erased gains, Treasuries rose and the dollar fell, as the broad weakness across most sectors added to signs that U.S. economic growth is cooling from prior quarters -- potentially by more than projected. It may reinforce investor expectations that the Federal Reserve will hold off on raising interest rates this year amid concern about trade and global growth.
· British Prime Minister Theresa May suffered an embarrassing defeat by lawmakers Thursday in a vote that left her bid to secure a European Union divorce deal stuck between an intransigent EU and a resistant U.K. Parliament — with Brexit just six weeks away.
The House of Commons voted by 303 votes to 258 against a motion reiterating support for May's approach to Brexit — support expressed by lawmakers in votes just two weeks ago.
The defeat is symbolic rather than binding, but shows how weak May's hand is as she tries to secure changes to her divorce deal from the EU in order to win backing for it in Parliament.
Lawmakers intent on averting a "no-deal" Brexit are gathering forces to make a push in a new series of votes on Feb. 27 to force the government's hand.
· Oil rose for a third day on Thursday, with Brent crude reaching its highest so far this year, but gains were capped after the steepest decline in U.S. retail spending since 2009 heightened investor fears of a global economic slowdown.
Prices clawed back gains after stock markets pared some losses. Crude futures also drew support from investor optimism that the United States and China could resolve their trade dispute.
Brent crude futures were up 82 cents, or 1.3 percent, at $64.43 a barrel around 2:25 p.m. ET, down from a session high of $64.81, their highest intraday level in nearly three months.
U.S. crude futures ended Thursday's session 51 cents higher at $54.33 a barrel, posting a 1 percent gain on the day.
Reference: CNBC
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