· Sterling jumped to a two-week high versus the dollar and posted its largest daily percentage gain in seven months on hopes of a Brexit resolution. The pound was last up 1.9% at $1.2447 GBP=.
On Thursday, Irish Prime Minister Leo Varadkar said a Brexit deal could be clinched by the end of October to allow the United Kingdom to leave the European Union in an orderly fashion, after what he called a very positive meeting with Boris Johnson. Ireland is a major factor in the prolonged Brexit impasse.
In afternoon trading, the dollar index posted its biggest daily drop in five weeks. It last fell 0.4% to 98.70 .DXY, after earlier sliding to a two-week trough.
The yen, another safe haven in times of geopolitical and financial stress, also fell to a one-week low against the dollar, weakening as well against riskier currencies such as the Australian dollar.
The dollar was last up 0.4% against the Japanese yen at 107.89 yen JPY=.
· Top U.S. and Chinese negotiators wrapped up a first day of trade talks in more than two months on Thursday as business groups expressed optimism the two sides might be able to ease a 15-month trade war and delay a U.S. tariff hike scheduled for next week.
“We had a very, very good negotiation with China,” U.S. President Donald Trump told reporters after the talks concluded. He reiterated his plans to meet with Liu at the White House on Friday, regarded as a good sign.
· Minneapolis Federal Reserve Bank President Neel Kashkari on Thursday said he did not expect the U.S. economy to enter recession, but would support another rate cut.
"My base-case scenario is still growth, I'm not forecasting recession, but the risks to the downside are increasing," Kashkari told the Wall Street Journal in an interview.
· A Brexit deal could be clinched by the end of October to allow the United Kingdom to leave the European Union in an orderly fashion, Irish Prime Minister Leo Varadkar said after what he called a very positive meeting with Boris Johnson.
In a joint statement, the two leaders said they “could see a pathway to a possible deal” and that the EU’s chief negotiator Michel Barnier would meet his British counterpart Steve Barclay in Brussels on Friday.
· A no-deal Brexit would present “enormous challenges” to the Irish economy and cut growth to just 0.8% next year, Ireland’s Central Bank said in its most detailed set of projections to date on the potential risks.
The forecast for next year should Britain leave the bloc on Oct. 31 without any kind of transition period was similar to the official government forecast for 0.7% gross domestic product growth, which Finance Minister Paschal Donohoe used as his base case when presenting a “no-deal” budget for 2020.
· Oil prices rose on Thursday as OPEC indicated that all options were on the table to balance oil markets and that it would take a decision in December on supply for next year.
Mohammad Barkindo, leader of the exporter group, did not specify if the move would mean extending a pact to rein in production to stabilize prices, but the comments appeared to nudge the market out of pessimism over U.S.-China trade talks.
Global benchmark Brent crude futures rose by 90 cents, or 1.5%, to $59.21 a barrel. U.S. West Texas Intermediate (WTI) futures settled 96 cents higher, or 1.8% at $53.55 per barrel.
· U.S. President Donald Trump said on Thursday he hopes he can mediate between Turkey and the Kurds following Turkey’s offensive on U.S.-allied Kurds in northeast Syria.
Trump, who pulled U.S. troops out of the area before the Turkish attack, said on Twitter that the United States had three options.
“We have one of three choices: Send in thousands of troops and win Militarily, hit Turkey very hard Financially and with Sanctions, or mediate a deal between Turkey and the Kurds!” Trump said.
Reference: CNBC, Reuters
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