· The euro languished near a 22-month low on Thursday, weighed down by ailing growth in Germany and the spectre of political uncertainty in Spain.
That is impacting the euro which on Thursday suffered its worst day in over six weeks, falling 0.6 percent to a 22-month low of $1.1141.
It traded flat on Thursday at $1.1154.
“Political uncertainties combined with economic concerns are a rather bad cocktail for the euro. In particular if the economy on the other side of the Atlantic is humming,” Antje Praefcke, an analyst at Commerzbank, wrote in a note to clients.
The greenback rallied to a 23-month high of 98.189 against a basket of key rivals overnight while gaining more than half a percent, largely propelled by the euro’s weakness. The index last traded 0.15 percent lower at 98.027.
Investors will watch the release on Friday of U.S. gross domestic product data for the first three months of 2019, for signs of whether the United States remains stronger than other leading economies.
· The dollar remained strong, although it struggled to extend its latest gains, amid easing momentum among equities and the absence of US data that could trigger additional demand. The EUR/USD pair, however, extended its decline and nearer the yearly low, as bad news came from Germany. The yield on the 10-year government bond fell below 0.0% this Wednesday, as the IFO survey showed that business sentiment continued deteriorating in April, as the Business Climate Index fell to 99.2 from 99.6 in March. The US didn't publish relevant macroeconomic data, with all eyes in Durable Goods Orders, to be out this Thursday, and the advanced estimate of Q1 GDP next Friday. There are no releases scheduled in the EU in the next 24 hours.
Wall Street struggled to extend its Tuesday's gains amid mixed earnings reports cooling down investors' optimism. Nevertheless, the greenback retained its strength in the last trading session of the day, with the EUR/USD pair collapsing to the current 1.1440 price zone, its lowest since June 2017. From a technical perspective, the pair is poised to extend its slump, as, in the 4 hours chart, not only it extended its decline below all of its moving averages, but technical indicators accelerated their slumps, maintaining strong downward slopes, the Momentum at fresh weekly lows and the RSI entering oversold territory. Bears will try now to push the pair down to 1.1100 and test bulls' determination around the level.
Support levels: 1.1140 1.1100 1.1065
Resistance levels: 1.1200 1.1235 1.1280
· Experts at the Credit Suisse Global Supertrends Conference said major economies should welcome China’s rise as an opportunity to recommit to and reestablish international statutes.
“The world should accept the ascendancy of China, embrace it, make sure we minimize some of its more outrageous behavior, but at the same time integrate China into a new world order in which it plays a great role,” said Ho Kwon Ping, founder of hospitality group Banyan Tree Holdings.
· China’s central bank has no intent to tighten or relax monetary policy, a vice governor said on Thursday.
Financial market views over China’s policy outlook have shifted markedly since the release of better-than-expected first-quarter GDP and March economic data, which suggested the economy may be starting to steady after a flurry of earlier growth-boosting measures.
Following signs of improvement in the economy, policy insiders told Reuters that PBOC is likely to pause to assess conditions before making any further moves to cut bank reserve requirements.
· The Bank of Japan told investors for the first time on Thursday it will keep interest rates at super-low levels for at least one more year, seeking to dispel uncertainty over its commitment to ultra-loose policies as the economy comes under fresh pressure.
The move puts the BOJ in line with the Federal Reserve and the European Central Bank, which have been forced to pause efforts to scale back crisis-mode policies due to heightening uncertainty over the global economic outlook.
· In fresh projections released on Thursday, the BOJ slightly cut its economic growth and inflation forecasts.
It now sees growth of 0.9 percent in the next fiscal year beginning in April 2020, down from 1.0 percent projected in January but still above expectations in a recent Reuters poll of economists.
It also forecast consumer inflation would hit 1.6 percent the following year, conceding that price growth will fall short of its target for at least three more years. Core inflation in March was 0.8 percent.
· South Korea’s economy unexpectedly shrank in the first quarter, marking its worst performance since the global financial crisis, as government spending failed to keep up the previous quarter’s strong pace and as companies slashed investment.
A worse-than-expected downturn in the memory chips sector hit first quarter capital investment, while slumping exports amid the Sino-U.S. trade dispute erased gains from private consumption, the Bank of Korea said on Thursday.
Gross domestic product (GDP) in the first quarter declined a seasonally adjusted 0.3 percent from the previous quarter, the worst contraction since a 3.3 percent drop in late 2008 and sliding from 1 percent growth in Oct-Dec, the Bank of Korea said on Thursday.
None of the economists surveyed in a Reuters poll had expected growth to contract. The median forecast was for a rise of 0.3 perc
· North Korean leader Kim Jong Un and Russian President Vladimir Putin met at a summit on Thursday intended to show Washington is not the only power with enough clout to engage with Pyongyang on its nuclear program.
Speaking before the start of a second session, Putin said he and the North Korean leader had substantive discussions on issues including the nuclear standoff.
· Brent crude oil on Thursday rose above $75 per barrel for the first time in 2019 in the wake of tightening sanctions on Iran, while gains in U.S. prices were crimped by a surge in U.S. supply.
Brent crude futures rose to a 2019 high of $75.01 per barrel on Thursday and were at $74.90 per barrel at 0705 GMT, up 33 cents, or 0.4 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $65.94 per barrel, up 5 cents from their previous settlement.
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