· The dollar held modest losses against a basket of currencies on Wednesday as payroll processor ADP said U.S. companies added 275,000 workers in April, the biggest monthly gain since last July and exceeding analysts’ forecast of a 180,000 increase.
At 8:28 a.m. (1228 GMT), an index that tracks the greenback against the euro, yen, sterling and three other currencies was 0.05% lower at 97.426.
The net result was a rebound in a dollar index against a basket of currencies to 97.616, having earlier traded as low as 97.149.
The euro was back at $1.1200, after reaching as high as $1.1265, and the dollar steadied at 111.44 yen from a low of 111.03.
· U.S. government debt yields rebounded on Wednesday after Federal Reserve Chairman Jerome Powell said that the central bank sees a decline in inflation as merely temporary and not yet a worrisome sign for the economy.
The yield on the benchmark 10-year Treasury note trimmed losses to around the flatline at 2.514%, while the yield on the 30-year Treasury bond dipped to 2.919%. The 2-year Treasury note yield, which moves inversely with price, reversed an initial 6-basis-point drop and was last seen 4 basis points higher at 2.312%.
· The U.S. Federal Reserve on Wednesday held interest rates steady and signaled little appetite to adjust them any time soon, taking heart in continued job gains and economic growth and the likelihood that weak inflation will edge higher.
“We think our policy stance is appropriate at the moment; we don’t see a strong case for moving it in either direction,” Fed Chairman Jerome Powell said in a press conference following the end of the central bank’s latest two-day policy meeting.
Overall, he said, “I see us on a good path for this year.”
Fed policymakers said ongoing economic growth, a strong labor market and an eventual rise in inflation were still “the most likely outcomes” as the U.S. expansion nears its 10-year mark.
“The labor market remains strong ... economic activity rose at a solid rate” in recent weeks, the Fed said in a policy statement a day after President Donald Trump called on it to cut rates by a full percentage point and take other steps to stimulate the economy.
· The announcement of a U.S. trade deal with China is “possible” by next Friday, sources told CNBC on Wednesday.
A U.S. delegation met with Chinese negotiators in Beijing on Wednesday as the world’s two largest economies try to hammer out details of an agreement. Chinese Vice Premier Liu He will travel to Washington for talks next week.
White House chief of staff Mick Mulvaney said Tuesday that the U.S. should know “one way or the other in the next couple weeks” about how the trade talks will be resolved.
· British Prime Minister Theresa May fired her defense minister on Wednesday over a leak of discussions in the National Security Council about Chinese telecoms company Huawei, the latest of her allies to be ousted from government.
The sudden dismissal of Gavin Williamson, who “strenuously” denied involvement in the leak, was another blow for May, whose own premiership hangs by a thread after her failure so far to usher Britain smoothly out of the European Union.
· That secrecy was broken last month when the Telegraph newspaper reported Britain would allow Huawei a role in building parts of its 5G network, setting London at odds with Washington over the next generation of communications technology.
· Oil prices fell on Wednesday after U.S. crude inventories in the United States soared more than expected to their highest since September 2017 as production hit a record high.
The declines were somewhat tempered by the intensifying crisis in Venezuela and Washington’s stopping Iranian oil sanction waivers as of May 1, with the fall in the global Brent benchmark more muted.
U.S. crude futures settled 31 cents lower at $63.60 per barrel. Brent crude oil futures were down 2 cents at $72.04 per barrel around 2:10 p.m. ET (1810 GMT).
Reference: CNBC, Reuters
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