Government bonds are in the middle of a global rally, which has pushed U.S. Treasury yields to the lowest in more than 2-1/2 years and sent European rates to record lows on increasing bets major central banks will ease policy to bolster the global economy.
Waning expectations for a quick resolution to the United States-China trade war also hurt sentiment for the dollar.
· The focus now shifts to U.S. non-farm payrolls data due on Friday, which economists expect to have risen by 160,000 in June, compared with 75,000 in May.
· Positive payroll data is unlikely to buoy the dollar as expectations for U.S. rate cuts are strong, given low inflation and the fallout from the tariffs the United States and China have already imposed on each other’s goods.
· The dollar was little changed at 107.80 yen on Thursday, after touching a one-week low of 107.54 yen on Wednesday.
The greenback has fallen 3.5% versus the yen in the past three months amid growing signs the Fed will cut rates at its July 30-31 meeting.
· Benchmark 10-year U.S. yields touched 1.939%, the lowest since November 2016, before recovering slightly. Lower yields reduce the appeal of holding the dollar.
The dollar index against a basket of six major currencies was slightly lower at 96.734.
North Korea’s delegation to the UN said Wednesday that the country was responding to a letter sent to all UN member states late last month. In it, the U.S. — alongside the U.K., Germany and France — called on countries around the world to implement tougher sanctions on Pyongyang.
“Accusations of Eurozone currency manipulation are ... flying from the White House with talk of tariffs on the EU and European countermeasures heating up trade tension between the two regions,” said Robert Carnell, chief economist at Dutch bank ING.
In a tweet on Wednesday morning U.S. time, Trump said: “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA.”
He then called for easier monetary policy, adding that the U.S. should “match” the monetary policies of China and Europe.
· The U.S.-China trade dispute has had limited impact on the semiconductor sector, according to Ajit Manocha, CEO at chip industry association, Semi.
The tariff war between the two economic powerhouses has actually been a “very small” reason behind the slowdown seen in the semiconductor industry, Manocha told CNBC’s Arjun Kharpal and Geoff Cutmore at the World Economic Forum in Dalian, China on Monday.
The U.S. and China have been embroiled in a trade dispute for more than a year, with both sides levying duties on each other’s goods valued at hundreds of billions of dollars. Their months-long trade fight has shifted supply chains, rocked global equities and threatened the world economic outlook.
· However, Manocha said the outlook for semiconductors appears “very upbeat.”
“Tariff has not really slowed down the industry,” he said, even though he acknowledging that 2019 was “not a very good year” for the sector, in part due to an excess in capacity.
· U.S. President Donald Trump has touted his meeting with Chinese President Xi Jinping at the weekend as “far better than expected” — but several trade and investment experts said Beijing appears to have gained the upper hand in the trade war.
“It is looking like, so far, China is coming out as a winner from this G-20,” Francesco Filia, chief executive and chief investment officer at asset management firm Fasanara Capital, told CNBC’s “Squawk Box Europe” on Monday.
“It’s not even clear what they gave up in order to get it,” he said, noting there was a lack of details about what the two leaders agreed on at the meeting.
· Oil prices fell more than 0.5% on Thursday, weighed down by data showing a smaller-than-expected decline in U.S. crude stockpiles and worries about the global economy.
Front-month Brent crude futures, the international benchmark for oil prices, were down 1% at $63.21 per barrel by 0538 GMT. Brent closed up 2.3% on Wednesday.
U.S. crude inventories dropped by 1.1 million barrels last week, the Energy Information Administration (EIA) said on Wednesday. That compared with analyst expectations for a decrease of 3 million barrels
Reference: CNBC, Reuters
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