· The dollar held its earlier losses versus a basket of currencies on Thursday as payroll processor ADP said U.S. private hiring came in stronger than expected in August, while it revised lower its job reading for July.
An index that tracks the greenback against the euro, yen, sterling and three other currencies was down 0.05% at 98.40. It touched a one-week low of 98.14 earlier Thursday.
Payroll processor ADP said U.S. companies hired 195,000 workers in August, which was more than the 158,000 increase that analysts polled by Reuters had forecast. Traders and analysts await the government’s monthly payrolls report due at 8:30 a.m. on Friday as a confirmation of resilience in the labor market.
The yen fell on Thursday as global tensions including the U.S.-China trade conflict showed signs of thawing, bolstering investor confidence and reducing demand for safe-haven currencies. The pound rose to its highest level against the dollar in more than a month on hopes that a no-deal Brexit would be avoided.
The dollar was up 0.53% at 106.975 yen after reaching 107.235 yen, which was its highest level since late July. Against the euro, the yen was 0.57% lower at 118.1 after falling to 118.6, marking a three-week low versus the common currency.
Sterling continued its rally after British lawmakers approved legislation on Wednesday to extend the Brexit deadline for the third time and rejected Prime Minister Boris Johnson’s motion to hold a snap election.
The pound was last trading up 0.63% at $1.233, moving further from a three-year low reached on Tuesday. Against the euro, sterling gained 0.54% at 89.54 pence after touching near six-week high of 89.49pence.
· U.S. government debt yields rose across the board Thursday after the China’s Ministry of Commerce said that the leaders of the U.S. and Chinese trade delegations held a phone call and agreed to meet next month in Washington, D.C.
Though a formal trade agreement remains a distant prospect, Wall Street welcomed the news of the meeting as one of the first positive developments between the world’s two largest economies over the past several weeks.
The yield on the benchmark 10-year Treasury note rose 11 basis points to 1.562%, while the yield on the 30-year Treasury bond jumped a similar 9 basis points to 2.055%. The 2-year note yield traded higher at1.47%; yields rise as prices fall.
· China’s Ministry of Commerce said Thursday that U.S. and Chinese trade negotiators held a phone call in the morning and agreed to meet in early October for another round of negotiations. In a statement to CNBC, a U.S. Trade Representative spokesperson confirmed the phone call, but did not confirm the October meeting.
“There’s more possibility of a breakthrough between the two sides,” said Hu Xijin, editor-in-chief of the Global Times, a tabloid under the People’s Daily.
· Hu has been spot on with the recent developments in the escalated trade war. Most recently, he had warned about the Chinese retaliation just hours before China’s official announcement.
· British Prime Minister Boris Johnson on Wednesday night failed in his bid to call a snap general election for October 15. A bill introduced by opposition parties to block Johnson from taking the U.K. out of the European Union without a deal on October 31 was also passed and will not ascend to the House of Lords, the upper chamber of parliament. The bill is now expected to pass through the Lords and be presented for royal ascent on Friday.
British Prime Minister Boris Johnson promised on Thursday he would never delay Britain’s exit from the European Union, due on Oct. 31, saying he would rather be “dead in a ditch” than do so.
“It achieves absolutely nothing. What on earth is the point of further delay,” he added.
· Oil prices ticked higher on Thursday amid a sharp decrease in U.S. crude inventories and investor hopes of progress in resolving the U.S.-China trade feud.
Global benchmark Brent crude gained 16 cents, or 0.2%, to $60.86 a barrel. U.S. West Texas Intermediate (WTI) crude added 4 cents, or 0.1%, to $56.30 a barrel.
U.S. crude, along with gasoline and distillate inventories, fell last week. Crude stocks dropped 4.8 million barrels, which was more than the 2.5 million barrel draw analysts had expected, the Energy Information Administration said.
Net U.S. crude imports, however, rose last week by 934,000 barrels per day.
Reference: CNBC, Reuters
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