· The dollar traded near a three-week low versus the yen on Friday before a U.S. employment report expected to show a slowdown in job creation, highlighting concerns about the health of the world’s largest economy.
The U.S. currency also nursed losses against the euro and the pound after Bloomberg reported that Chinese officials have doubts about reaching a comprehensive long-term solution to the U.S.-Sino trade war.
· “The Fed is expected to be on hold in December, but the markets are trying to price in a rate cut next year, because people doubt that talks to end the trade war will go smoothly,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
“If the jobs data prints to the weak side, that would put even more pressure on the dollar.”
· The dollar stood at 108.00 yen JPY=EBS on Friday after hitting a three-week low of 107.89 yen in Asian trading.
· The U.S. currency is on course for a 0.6% decline against the yen this week, which would be its biggest weekly loss since Oct. 4. The dollar index .DXY against a basket of six major currencies fell 0.13% to 97.221, on course for a 0.63% weekly decline.
· The U.S. dollar index could fall to as low as 85 as the Federal Reserve grows its balance sheet again by purchasing more bond assets, a Citi strategist said Thursday.
“Our latest projections are that it would weaken even further — maybe to the high 80s, perhaps even as low as 85,” Mohammed Apabhai, head of Asia Pacific trading strategies group at Citi, told CNBC’s “Street Signs.” Technical analyst Daryl Guppy said last year that 85 is a “historical support level” for the dollar.
That’s because the Fed’s balance sheet has expanded quickly, by more than $205 billion since the beginning of September, Apabhai explained. In comparison, an increase of that size would take the European Central Bank more than a year to complete, he said.
· U.S. job growth likely slowed sharply in October, weighed down by a strike at General Motors (GM.N), while the unemployment rate is expected to tick up from near a 50-year low of 3.5%.
The 40-day strike by members of the United Auto Workers union, which came as hiring was already slowing, could make it difficult to get a clear pulse on the labor market and clues on the health of consumers, the economy’s engine.
“There is going to be more noise than signal in this employment report because of the GM strike,” said Ryan Sweet, senior economist at Moody’s Analytics in Westchester, Pennsylvania.
According to a Reuters survey of economists, non-farm payrolls probably increased by only 89,000 jobs in October, with manufacturing shedding at least 50,000 positions, which would be the most since 2009. Employment rose by 136,000 jobs in September.
· Japanese Finance Minister Taro Aso said on Friday he saw no need now to compile stimulus measures to prop up the economy, brushing aside a media report that the government was considering such a plan.
“I have not received instructions” from Prime Minister Shinzo Abe, Aso told reporters after a cabinet meeting. “I’m not considering anything that must be done now.”
· China’s Foreign Ministry said on Friday China and the United States have maintained close contact on a potential meeting of U.S. President Donald Trump and Chinese President Xi Jinping.
But speaking at a daily news briefing in Beijing, ministry spokesman Geng Shuang dismissed as speculation talk the two leaders will meet in Macau.
· A private survey showed October factory activity in China expanded at its quickest pace since February 2017.
The Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) came in at 51.7 for the month of October as production and new orders both expanded at a faster pace, with a “renewed increase in export business,” according to a joint press release by Caixin and IHS Markit on Friday.
· Hong Kong’s economy will likely “remain weak” for the rest of this year, economists and trade experts told CNBC on Friday.
“They’re getting hit on two fronts. The protests are impacting retail sales. It is impacting tourism. Added to that, of course, you’ve got the U.S.-China trade war, which is impacting exports. So, we’re expecting that it is unlikely that we’re going to see a positive growth in Q4. We’re going to see further contraction,” said Sian Fenner, lead Asia economist at Oxford Economics.
· The United States said on Thursday it had imposed sanctions on the Iranian construction sector and trade in four materials used in its military or nuclear programs, even as it waived sanctions to let foreign firms continue non-proliferation work in Iran.
The decisions announced by the U.S. State Department reflect an effort to increase pressure on Iran by putting wider swaths of its economy under sanctions, while leaving a door open to diplomacy by allowing work to proceed at Iranian nuclear facilities that makes it harder for Iran to develop a nuclear bomb.
· Oil prices edged up on Friday after a difficult week, but were still headed for losses of about 4%, hit by a combination of rising global supply and uncertain future demand.
U.S. crude rose for the first time in four days, gaining 18 cents, or 0.3%, to $54.36 a barrel by 0339 GMT. The contract was set for a weekly loss of more than 4%.
Brent crude was up 5 cents, or 0.1%, at $59.67 a barrel, leaving it on track for a drop of nearly 4%.
· Worries over global economic growth, along with oil demand, continue to haunt the market as leaders from the United States and China struggle to end a 16-month dispute that has roiled trade between the world’s top two economies.
The market received some respite from a run of poor economic data after an unexpected bounce in a private sector survey of Chinese manufacturing activity on Friday, which contrasted with the dour results of an official survey Thursday.
Japanese factory activity, however, sank to more than a three-year low in October, data showed on Friday, in a fresh warning sign for the world’s third-largest economy.
Reference: Reuters, CNBC
Thai
Eng