· The dollar hit its highest level in a month as economic and political uncertainties swept through Europe and Asia, pinning down most major currencies such as the euro and the yuan.
Worries over German manufacturing, the effect of a trade war on Asian economies and deepening concerns over Brexit and upcoming European parliamentary elections all make it an uncomfortable time for many countries in Europe and Asia.
The dollar hit a high of 98.189 against a basket of six major currencies, its highest level since April 26, when it hit a two-year high of 98.33.
· “Certainly the dollar has been acting like something of a safe haven even though the Fed has been more dovish than has been expected,” said Neil Mellor, FX strategist at BNY Mellon.
“I think what’s happened is that the Fed has been ‘out-doved’ by other central banks one by one, the latest being the RBA [Reserve Bank of Australia] in Australia, and that has allowed the dollar to strengthen,” he added.
· The euro inched down to hit a one-month low of $1.1133 in early trade while sterling was within a sliver of slipping below $1.26 for the first time since early January.
· The yen also advanced broadly on Thursday as persistent U.S.-China trade fears and Brexit concerns fanned risk aversion, lifting the safe-haven Japanese currency.
The yen was 0.1% firmer at 110.23 to the dollar, having pulled back from a two-week low of 110.675 plumbed on Tuesday.
· The United States is at least a month from enacting its proposed tariffs on $300 billion in Chinese imports as it studies the impact on American consumers, U.S. Treasury Secretary Steven Mnuchin said on Wednesday.
“There won’t be any decision probably for another 30 to 45 days,” Mnuchin said in a hearing before the U.S. House of Representatives Financial Services Committee.
That timeline, which is accelerated compared to previous rounds of tariffs, means the next levies could be ready around the time when Trump is expected to meet Chinese President Xi Jinping at a G20 summit in Japan June 28-29.
Mnuchin said the Trump administration is open to holding new talks with China if the two sides can proceed on the basis of previous negotiations.
· Prime Minister Theresa May was under intense pressure to name a date for her departure after her final Brexit gambit failed, overshadowing a European election that will show a United Kingdom still riven by divisions over its EU divorce.
The Times newspaper reported that May would name a date for her departure on Friday. May will remain as prime minister while her successor is elected in a two-stage process, the newspaper said.
The delay to Brexit means that voters across the United Kingdom are going to the polls on Thursday in a European parliamentary election that has been fought almost exclusively over the EU divorce.
According to polling data published before polls opened, Nigel Farage’s Brexit Party was on course to win and May’s Conservatives are on course to do very badly. Results are expected after 2100 GMT on Sunday.
· Investors bet most Asian currencies will come under further pressure, a Reuters poll showed, with trade tensions between the United States and China firmly dominating headlines once again.
With diminishing hopes of a long-awaited trade deal between the world’s top two economies, the mood across markets have been apprehensive with investors shifting money to safer bets.
Trade reliant economies, such as Taiwan and South Korea, are among the most exposed to a deterioration in trade relations.
· Huawei could have its own operating system for smartphones and laptops ready for use in China by fall this year, the head of the company’s consumer division told CNBC.
Still, he stressed that would only happen if the company were completely stopped from using Google’s and Microsoft’s software.
· Prime Minister Narendra Modi’s Hindu-nationalist party scored a historic victory in India’s general election, his foreign minister said on Thursday, as officials counted hundreds of millions of votes after the massive, multi-stage poll.
Official data from India’s Election Commission showed Modi’s Bharatiya Janata Party (BJP) ahead in 292 of the 542 seats available, well over the 272 seats needed for a majority in the lower house of parliament.
· Japan's Finance Minister Taro Aso: Want to raise sales tax in October as planned, it is needed to secure stable funds
· Oil prices dropped by around 1% on Thursday, extending falls from the previous session amid surging U.S. crude inventories and weak demand from refineries.
Brent crude futures, the international benchmark for oil prices, were at $70.36 per barrel at 0652 GMT, down 63 cents, or 0.9%, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down by 51 cents, or 0.8%, at $60.91 per barrel.
Reference: Reuters, CNBC, FX Street
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