· The dollar held steady against a basket of currencies on Wednesday as traders rolled back bets of an aggressive interest rate decrease next month after comments from Federal Reserve officials that such a move may not be warranted at this time.
The greenback and the euro strengthened against the yen after U.S. Treasury Secretary Steven Mnuchin was quoted by CNBC as saying the trade deal between the United States and China is “about 90%” complete. Mnuchin’s comments were later restated to show he was using the past tense to describe progress in the U.S.-China talks.
Traders have been speculating whether Trump and Xi could at least reach an agreement to restart talks at the summit in a bid to avert more tariffs between the two nations.
Earlier Wednesday, Trump told Fox Business Network he would impose additional duties on Chinese imports if he does not clinch a deal with Xi.
In late U.S. trading, the dollar was up 0.57% at 107.790 yen, while the greenback was little changed against the euro at $1.1372.
The dollar index edged up 0.09%, holding above a three-month low, in the wake of comments from two Federal Reserve officials, which cooled expectations the central bank would lower key lending rates by an aggressive half a percentage point at its next policy meeting on July 30-31.
· Interest rates futures implied traders fully expect a rate cut from the Fed next month, but they now see a 24% chance of a 50 basis-point decrease, down from 30% late on Tuesday, according to CME Group’s FedWatch tool.
· Bitcoin rang up a stellar day, jumping over 16.26% to its highest level since January 2018.
The world’s biggest cryptocurrency has surged in value since April and on Wednesday hit a peak of $13,666.02 on the Bitstamp exchange, the highest level since January 2018. So far this year, bitcoin has risen more than 260%, although it remains below its all-time high of nearly $20,000 hit in December 2017.
Bitcoin last traded up 14.7% at $13,475.
· U.S. President Donald Trump said on Wednesday that a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on virtually all remaining Chinese imports if the two countries continue to disagree.
Trump, who departed for the G20 leaders summit in Osaka, Japan, on Wednesday, also raised the possibility that he may impose a lower, 10% duty on a $300 billion list of Chinese imports, instead of the proposed 25% rate.
· U.S. President Donald Trump accused Federal Reserve Chairman Jerome Powell on Wednesday of doing a “bad job” and “out to prove how tough he is,” but any move to oust him would likely touch off a legal fight with big repercussions in financial markets as well.
· The next several weeks will be key to showing how much of an argument there is for an interest rate cut to counteract weak inflation pressures and uncertainty over U.S. trade policy, a central bank policymaker said on Wednesday.
Uncertainty over whether the U.S. and China will reach a trade deal could slow growth in an economy that is also consistently failing to reach the Fed’s 2% inflation target, concerns that could bolster the case for a rate cut, San Francisco Federal Reserve Bank President Mary Daly said at an event in New York.
· Oil prices rose more than 2% on Wednesday and hit their highest in about a month, buoyed by U.S. government data that showed a larger-than-expected drawdown in crude stocks as exports hit a record high, and surprise drops in refined product stockpiles.
Brent crude futures rose $1.44, or 2.2%, to settle at $66.49 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $1.55, or 2.7%, to settle at $59.38 a barrel.
· Crude inventories fell 12.8 million barrels last week, the Energy Information Administration said, far surpassing analyst expectations for a decrease of 2.5 million barrels. That was the most since September 2016, according to the statistical arm of the Department of Energy.
Net U.S. crude imports fell last week by 1.2 million barrels per day (bpd). Overall crude exports rose to 3.8 million bpd, beating its previous record of 3.6 million bpd in February.
Reference: Reuters, CNBC
Thai
Eng