· The euro gained on Thursday as the dollar weakened after the Federal Reserve on Wednesday cut interest rates for the third time this year and left open the question of whether it would cut them further.
The dollar was falling against most currencies, particularly the Chinese offshore yuan, which rose to an 11-week high.
The Fed lowered its benchmark rate by 25 basis points to a target range of 1.50% to 1.75%. But it dropped a reference in its policy statement that it would “act as appropriate” to sustain economic expansion — language considered a sign of future cuts.
Still, lack of an explicit signal the Fed was done with easing for now was taken as less hawkish than expected, helping to drive the dollar down.
The euro was up 0.1% at $1.1161, after earlier reaching a 10-day high of $1.11705.
The dollar index rose on Wednesday to its highest since Oct. 17 as Fed Chairman Jerome Powell spoke about the central bank’s decision. But it slipped 0.4% on Thursday to 97.29, its lowest in a week.
The dollar also fell against the safe-haven Japanese yen, by 0.2% to 108.62 yen. It earlier reached a six-day low of 108.54.
The yen gained after Chile withdrew as host of an APEC summit in November, where the United States and China had been expected to take major steps toward ending a 15-month-old trade war.
Traders still think the world’s two biggest economies will arrive at a trade truce. China’s Foreign Ministry said on Thursday Chinese and U.S. heads of state have been maintaining contact.
The Chinese yuan rallied to its highest in 11 weeks against the dollar. The offshore yuan last traded hands at 7.0345 per dollar, up 0.1%.
· President Donald Trump said Thursday a new location for signing the “phase one” U.S.-China trade deal will be announced soon after the initial gathering in Chile was canceled due to protests.
“China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances,” Trump tweeted on Thursday. “The new location will be announced soon. President Xi and President Trump will do signing!”
· A deeply divided U.S. House of Representatives took a major step on Thursday in the effort to impeach President Donald Trump when lawmakers approved rules for the next, more public, stage in the Democratic-led inquiry into Trump’s attempt to have Ukraine investigate a domestic political rival.
In the first formal test of support for the impeachment investigation, the Democratic-controlled House voted almost entirely along party lines - 232 to 196 - to move the probe forward in Congress.
The vote allows for public impeachment hearings in Congress, which are expected in the coming weeks, portending a bitter battle ahead as the United States heads into a presidential election year.
· Britain’s government will not name a successor to Bank of England Governor Mark Carney before a national election due on Dec. 12, a finance ministry official said.
The BoE’s current governor, Mark Carney, is due to leave the central bank on Jan. 31, which is also the latest deadline for Britain to leave the European Union.
· U.S. President Donald Trump waded into Britain’s election campaign on Thursday, saying the leader of the left-wing opposition Labour Party, Jeremy Corbyn, would be “so bad” for Britain if he wins.
In an interview with LBC radio, Trump also called Prime Minister Boris Johnson a “fantastic man”.
“Corbyn would be so bad for your country. He’d be so bad, he’d take you in such a bad way. He’d take you into such bad places,” Trump said.
· Spain’s main political parties kicked off a highly condensed electoral campaign on Thursday night, just 10 days before Spaniards head to the polls for a repeat election that is likely to show an increasingly fragmented society.
With voting booths set to open on Nov. 10, the election will be Spain’s fourth in four years and opinion polls suggest that no party and neither the left nor right wing bloc will gain enough seats to take control of the 350-member parliament.
· Oil prices came under pressure on Thursday from rising U.S. crude oil stocks and weak factory activity in China, with few bullish factors on the horizon.
Brent crude futures fell 40 cents to settle at $60.21 a barrel, erasing earlier gains. They had dropped by 1.6% on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures fell 88 cents, or 1.6%, to settle at $54.18 per barrel. On the month, however, they are set for a rise of about 0.9%, its biggest monthly gain since June.
A Reuters survey showed on Thursday that oil prices are likely to remain pressured this year and next. The poll of 51 economists and analysts forecast Brent crude would average $64.16 a barrel in 2019 and $62.38 next year.
· Factory activity in China shrank for a sixth straight month in October while growth in the country’s service sector activity was its slowest since February 2016, official data showed on Thursday.
Reference: CNBC, Reuters
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