· The ICE U.S. Dollar Index DXY, +0.00% a measure of the currency against six major rivals, was off 0.1% at 96.918. The U.S. unit traded at 111.99 Japanese yen USDJPY, -0.05% down marginally from its level late Tuesday in New York trading at ¥112.02. The euro EURUSD, +0.0177% fetched $1.1308, up from $1.1283.
The Australian dollar AUDUSD, -0.1393% was a big gainer in the wake of the China data, jumping to a more-than-two-month high versus its U.S. counterpart to trade as high as 72.08 U.S. cents. It remains up 0.3% at 71.92 cents.
The greenback weakened on Wednesday as better-than-expected economic data in China bolstered risk appetite and boosted the Australian dollar.
· China’s economy grew at a steady 6.4 percent pace in the first quarter, defying expectations for a further slowdown, as industrial production surged and consumer demand showed signs of improvement.
The release of Purchasing Managers Indexes (PMIs) for the manufacturing and service sectors in Europe on Thursday will provide the next indication of the strength of the European economy. Investment inflows into Europe have been improving, which may give the euro a boost against the greenback.
· Data on Wednesday also showed that the U.S. trade deficit fell to an eight-month low in February as exports to China surged, helping to eclipse a rebound in overall imports, which could boost economic growth estimates for the first quarter.
· Weak U.S. economic data that marred the start of the year should change for the better in coming months, and ease some of the concerns among investors about the health of the recovery, St. Louis Federal Reserve President James Bullard said on Wednesday.
“My baseline case is that the temporary weakness we observed in January and February is going to dissipate and is dissipating,” Bullard said during a conference at the Levy Economics Institute at Bard College. “We will continue to get better news on the U.S. economy as we get into the second quarter and the third quarter and...the yield curve will steepen.”
· The Federal Reserve may need to buy more government bonds than it did before the 2008 financial crisis and conduct other money-market operations to implement its current approach to managing U.S. interest rates, an official of the New York Fed said on Wednesday.
· As the U.S. and China work through the final stages of trade negotiations, Chinese officials are identifying international travel dates on President Donald Trump’s calendar that might offer potential for a summit off of U.S. soil, according to three sources briefed on negotiations.
One trip in particular that’s risen to the top of the list: Trump’s expected visit to Japan at the end of May, putting him in the Asia-Pacific region around the time negotiations are expected to conclude.
Neither the White House nor the Embassy of Japan would confirm the trip, in which Trump would be the first foreign leader received by Crown Prince Naruhito after he accedes to the throne on May 1.
· Japanese Prime Minister Shinzo Abe is expected to meet U.S. President Donald Trump at the White House on April 26 to discuss trade and efforts to contain North Korea’s nuclear program, a U.S. official said on Wednesday.
· North Korea tested a new type of tactical guided weapon on Wednesday, state media Korean Central News Agency (KCNA) said Thursday morning local time.
· The test of “a powerful warhead” was overseen by North Korean leader Kim Jong Un and marks the first public weapons test from the rogue regime since President Donald Trump’s historic meeting with Kim in Singapore last year.
· The White House and Pentagon did not immediately respond to CNBC’s request for comment. A U.S. defense official said that U.S. Strategic Command did not detect a missile launch from North Korea.
· The chances that Brexit will be cancelled are now greater than the chances Britain will leave the European Union without a deal, according to economists in a Reuters poll, who again pushed back their expectations for when the Bank of England will raise interest rates.
Last week, the EU delayed Brexit until the end of October, averting for now the risk of an abrupt British departure, which investors and policymakers fear would hurt both economies.
None of the 75 economists polled expect Bank Rate to be moved from 0.75 percent when the Bank of England’s Monetary Policy Committee announces its decision next month. The MPC will publish its quarterly update of economic forecasts the same day.
· Oil prices rose for a second day on Wednesday on signs of strong demand from refineries in China, the world’s second-largest crude user, amid tightening supply as producers curtail output and as oil inventories in the United States fell unexpectedly.
International benchmark Brent crude oil futures rose 21 cents, or 0.29 percent, to $71.93 a barrel by 0319 GMT. Brent gained as much 0.5 percent to 72.08 a barrel, the highest since Nov. 8 and the highest this year.
U.S. West Texas Intermediate (WTI) crude futures were at $64.45 per barrel, up 40 cents, or 0.6 percent from their previous settlement.
· China’s refinery throughput in March rose 3.2 percent from a year earlier to 53.04 million tonnes, or 12.49 million barrels per day (bpd), data from the National Bureau of Statistics showed on Wednesday.
Reference: CNBC, Reuters, Market Watch
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