· The dollar nursed losses in Asia on Thursday after the Federal Reserve roiled markets by abandoning all plans to raise rates this year, a signal its three-year campaign to normalize policy might be at an end.
The Fed’s swerve sent the dollar sliding to 110.47 yen, with its 0.6 percent loss overnight the biggest drop since the flash crash of early January.
The euro flew to a seven-week peak and was last trading at $1.1424, a world away from its recent low of $1.1177.
That left the dollar down at 95.908 against a basket of currencies, having lost 0.5 percent overnight. It was also poised precariously on its 200-day moving average, and a sustained break would be taken as technically bearish.
· “Markets were universally poised for a very benign outcome and the Fed dutifully delivered, their message overall matching the most dovish of expectations,” said Richard Franulovich, head of FX strategy at Westpac.
“The median 2019 projection is for no hikes, a strong majority of 11 among 17 at zero; a dramatic shift from just two members looking for no Fed hikes in 2019 back in December.”
· One currency with problems of its own was sterling, which retreated to $1.3205 after British Prime Minister Theresa May’s request to delay Brexit until June 30 faced resistance from parts of the European Union.
· EUR/USD daily chart
EUR/USD is trading in a bear trend below its 200-day simple moving average (SMA).
Investors sold the US Dollar as the Fed was much more dovish than expected.
EUR/USD 30-minute chart
EUR/USD is trading above its main SMAs suggesting bullish momentum in the short-term.
EUR/USD is testing the 1.1450 key resistance. The next resistance is at 1.1500 figure.
To the downside, support is at 1.1400 and 1.1370 level.
· President Donald Trump said Wednesday that his administration’s tariffs on Chinese imports could stay in place indefinitely until Beijing complies with a still-developing trade deal — which the president said “is coming along nicely.”
The president’s comments come amid conflicting reports about how close the world’s two largest economies are to reaching a deal and just what China is willing to concede in talks. Negotiations will restart next week when U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin travel to Beijin
· Prime Minister Theresa May has a good chance of getting her twice-defeated Brexit deal approved by parliament next week, a junior Brexit minister in her government said on Thursday.
“We have a good shot at actually landing the deal next week,” Kwasi Kwarteng told Sky. “People are coming over already because people’s minds are focusing on the deal and the ability to leave the EU in a timely and orderly way.”
The British parliament should be given the opportunity to find an alternative way to leave the European Union and lawmakers would support a Norway-style post-Brexit relationship, Conservative lawmaker Oliver Letwin said on Thursday.
· The investment banking environment has seen one of the worst first quarters in recent history, the CEO of UBS has warned, who told CNBC that he expects revenues to decline by about a third from a year ago.
“I think that we are facing macro and geopolitical challenges that we all know, but in addition to that the first quarter was lacking any of the elements of positive seasonality this year,” Sergio Ermotti, chief executive of UBS, told CNBC’s Joumanna Bercetche on Wednesday.
· Europe and the U.S. are clashing over Huawei’s role in the future of 5G.
While Donald Trump’s administration has tried to pressure allied countries, including those in Europe, to ban the Chinese firm from being included in the rollout of the next generation of mobile networking technologies, nations including the U.K. and Germany aren’t listening.
The U.S. alleges that Huawei’s networking equipment could be used for espionage by the Chinese government. Huawei has repeatedly denied that it poses any risk and said it would never allow Beijing to get its hands on customer data. Experts are skeptical, however, about Huawei’s assurances because Chinese national security laws appear to compel companies operating in the country to comply with all government requests for such info.
Despite Washington’s protests, Germany is not excluding Huawei from becoming part of its national 5G infrastructure. German Chancellor Angela Merkel said earlier this month that the country will define its own security standards.
Other countries including Thailand and the U.K. have also not banned Huawei.
· Italy’s goal is to add 7 billion euros ($8 billion) in new business with China through 30 corporate accords due to be signed on Saturday, Il Sole 24 Ore daily reported on Thursday.
Chinese President Xi Jinping is due to visit Rome this week and is expected to sign a preliminary accord with Prime Minister Giuseppe Conte, hooking Italy up to his giant Belt and Road infrastructure project.
· Japanese Prime Minister Shinzo Abe may meet President Donald Trump in the United States in late April for talks on North Korea and Japan-U.S. trade, two government officials and Japanese media said on Thursday.
The meeting was requested by the Japanese side and arrangements were being made for the end of April, the Asahi Shimbun daily said, without giving a specific date.
· Oil eased from 2019 highs reached earlier in Thursday’s session, but markets remain relatively tight amid supply cuts led by producer club OPEC and U.S. government sanctions on Iran and Venezuela.
U.S. West Texas Intermediate (WTI) crude futures were at $60.11 per barrel at 0756 GMT on Thursday, down 12 cents, or 0.2 percent, from their last settlement. WTI reached its highest level since Nov. 12 earlier in the day, at $60.33 per barrel.
International Brent crude oil futures were at $68.54 a barrel, close to their last settlement after hitting $68.69 a barrel earlier in the session, the highest since Nov. 13.
Crude prices have been pushed up by almost a third since the start of 2019 by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), as well as by sanctions enacted against Iran and Venezuela by the United States.
· Oil daily chart
Oil is trading above the 50 and 100-day simple moving averages (SMAs) suggesting a bullish bias.
The level to beat for bulls is 60.20. The next resistances to the upside are at 60.60 and 61.00 figure.
To the downside, supports are at 59.30 and 59.00 level.
Reference: Reuters, CNBC, BBC, Daily FX, Bloomberg
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