· The dollar steadied against a basket of currencies on Friday after hitting a 2.5-week high overnight as data pointed to a sturdy U.S. economy, while the euro was dented by weak manufacturing activity in Europe.
Many financial markets were closed for the Good Friday Easter holiday.
Currency markets remain open but volume is expected to be light.
The dollar index, which measures the greenback against a basket of six other major currencies, rose to as high as 97.485 overnight, its highest level since April 2. It last traded at 97.392 on Friday, down 0.1% on the day.
“In addition to the recent upticks in Chinese data, the latest U.S. retail sales numbers have helped to ease investor worries about the global economy. It’s pretty quiet trading due to the Easter holiday, though,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
· The euro fell against the dollar to as low as 1.1226, its lowest level in 1.5 weeks, after the worse-than-expected data from the Europe’s largest economy.
The single currency was last up 0.1% against the U.S. dollar at $1.1242, up 0.1% on the day.
· EUR/USD TECHNICAL ANALYSIS
On a daily chart, EUR/USD declined by the most in a single day in almost four weeks (-0.6%). Prices fell under a near-term rising support line that was initiated by a bullish Morning Star at the end of March. This was also after support-turned-resistance held at 1.1302. Negative RSI divergence also preceded the turn lower over the past 24 hours. With that in mind, EUR/USD is eyeing support next at 1.1176. If broken, the dominant downtrend from a year ago may resume.
· The United States won a World Trade Organization (WTO) ruling on Thursday against China’s use of tariff-rate quotas for rice, wheat and corn, which it successfully argued limited market access for U.S. grain exports.
The case, lodged by the Obama administration in late 2016, marked the second U.S. victory in as many months. It came amid U.S.-China trade talks and on the heels of Washington clinching a WTO ruling on China’s price support for grains in March.
· China’s better-than-expected first quarter economic growth has spurred some investment banks to raise their growth forecasts for this year.
Economists at Barclays, ING and Citi have raised their China growth outlook for 2019 on Wednesday, though others may be holding off for now.
The Chinese government announced Wednesday that gross domestic product expanded by 6.4 percent year-on-year in the first three months of 2019. That was higher than the 6.3 percent predicted by analysts in a Reuters’ poll.
· Japan will invite U.S. President Donald Trump to visit Japan May 25 to 28, its top government spokesman said on Friday.
Trump will meet Japan’s new emperor and empress as well as Prime Minister Shinzo Abe during his visit, Chief Cabinet Secretary Yoshihide Suga told a news conference.
· In March 2018, President Donald Trump uttered his famous declaration that “trade wars are good and easy to win.” A little more than a year later, it looks as if Trump is losing the trade war he started with China.
The tariffs that Trump slapped on Chinese goods -- and the additional tariffs he threatened -- may have dinged China’s economy. Most data sources indicate that Chinese growth slowed a bit in 2018. That dip could have been due to government efforts to constrain credit growth, but many believe that Trump’s tariffs hurt business confidence and slowed investment. That makes sense, since any company thinking about making their products in China would have to worry that Trump would make it hard to sell those products in the U.S. The trade war has given multinationals an incentive to accelerate their plans to shift production out of China, and has probably made Chinese companies more cautious as well:
But the U.S. was also sideswiped by the trade war. Taxing Chinese-made products raised prices for American consumers and factories alike. A pair of studies by trade economists put the losses to the U.S. economy in the tens of billions of dollars annually.
And that doesn’t count the impact of Chinese retaliation. Although the U.S. runs a trade deficit with China, it still exports almost $200 billion a year to that country. Chinese tariffs hit American farmers hard, as the country halted most imports of soybeans from the U.S.:
Trailing three-month Chinese imports of U.S. soybeans have fallen to their lowest level in three years, during what should be peak season
Trump is now beating a retreat. A trade truce with China, enacted in late 2018, left most of the U.S.’s biggest goals -- intellectual property theft, currency manipulation, forced technology transfer and access to the Chinese market -- unfulfilled. Essentially, China will buy more U.S. farm products and a few other exports, and Trump will back off. A final deal is likely to look even more like an ignominious defeat for the Trump administration.
Reference: CNBC, Reuters, Bloomberg
Thai
Eng