· Dollar weakens as euro climbs on EU common fund proposal
The U.S. dollar fell to a more than two-week low against the euro as the common currency enjoyed a boost from the recently announced proposal for a common fund that could move Europe closer to a fiscal union as it tries to counter the economic hit from the coronavirus pandemic.
France and Germany have proposed a 500 billion euro ($543 billion) Recovery Fund to offer grants to regions and sectors hit hardest by the coronavirus crisis and to allow borrowing by the European Commission on behalf of the whole EU.
The euro also found strength from survey data on Tuesday that showed German investor sentiment improved much more than expected in May.
The single currency was up 0.54% at $1.0983, its highest since May 1.
The dollar found little support from the release of the minutes of the U.S. Federal Reserve’s most recent policy-setting meeting, which showed policymakers agreed to use their tools “as appropriate” to support the economy and re-upped a pledge to keep interest rates near zero.
The U.S. dollar, which draws flows when investors shun risk, was broadly weaker on the day as market participants appeared to bet on hopes of a strong economic recovery from a coronavirus-fueled slump.
The U.S. Dollar Currency Index, which measures the greenback’s strength against six major currencies, was down 0.42% at 99.138, on pace for its third straight day of losses.
· Fed minutes show fears of ‘extraordinary amount of uncertainty and considerable risks’ because of coronavirus
Federal Reserve officials called into action to rescue the economy from the clutches of the coronavirus worried about longer-lasting impacts from the pandemic including a second round of infections and the burden that low-income households would face, minutes released Wednesday from the central bank’s April meeting showed.
The meeting, which ended April 29, concluded with the Federal Open Market Committee holding steady on interest rates and pondering future measures ahead. The minutes indicated that more action is likely ahead, though they did not specify when. Members said “further clarity” on asset purchases might be needed “later this year.”
After slashing its benchmark rate to near zero as the coronavirus pandemic took hold, the Federal Open Market Committee voted to keep the rate there in a range between 0% and 0.25% and not move it until a recovery is firmly in place.
The action came as central bank officials noted the excessive damage the virus was doing to the economy and the potential for destruction ahead.
“Participants commented that, in addition to weighing heavily on economic activity in the near term, the economic effects of the pandemic created an extraordinary amount of uncertainty and considerable risks to economic activity in the medium term,” the minutes said.
One area of particular concern is what should happen in the event that coronavirus infections surge later in the year. The minutes noted that the “more pessimistic” outlook for a rebound was probably as likely as the baseline forecast for improvement.
They also noted the danger of high unemployment levels as workers became separated from the workforce. The burden for the economic downturn, which is likely to be the worst in U.S. history for the second quarter, “would fall disproportionately on the most vulnerable and financially constrained households in the economy.”
· Moderna would never release coronavirus vaccine data different from ‘reality,’ chairman says
Moderna would never put out data on its potential vaccine for the coronavirus that was different from “reality,” the biotech firm’s chairman told CNBC on Wednesday.
The comment came a day after health-care publication STAT News reported that some vaccine experts were skeptical of Moderna’s new vaccine data, saying it did not provide critical information to assess its effectiveness. The report sent Moderna’s stock and the broader U.S. market lower.
The company put out the extent of data it had available, Moderna Chairman Noubar Afeyan said during an interview on “Power Lunch.” “We take what we do very seriously. We would not, have not put out some of the data to make anything look any different from the reality.”
· Trump opens door to in-person G7 June meeting despite pandemic
U.S. President Donald Trump on Wednesday said he may seek to revive a face-to-face meeting of Group of Seven leaders near Washington, after earlier canceling the in-person gathering of world leaders due to the novel coronavirus pandemic.
“I am considering rescheduling the G-7, on the same or similar date, in Washington, D.C., at the legendary Camp David,” Trump said in a Twitter post. “The other members are also beginning their COMEBACK. It would be a great sign to all - normalization!”
· Trump ‘considering’ travel ban after Brazil suffers deadliest coronavirus day on record
President Donald Trump said he is considering imposing a travel ban on Brazil, following the South American country’s deadliest day on record as a result of the coronavirus.
“We are considering it. We hope that we are not going to have a problem,” Trump told reporters at the White House late Tuesday.
His comments came shortly after Brazil’s daily death toll from the coronavirus jumped to a record of 1,179 on Tuesday.
It has recorded the third-highest number of confirmed coronavirus infections globally, behind the U.S. and Russia, respectively.
· Brazil coronavirus outbreak worsens, cases could soon be second highest in world
Brazil’s coronavirus outbreak worsened on Wednesday and the South American nation could soon have the second-highest number of cases in the world as the Health Ministry reported 888 new deaths and nearly 20,000 new cases in a single day.
Brazil could soon have more coronavirus cases than any nation in the world except the United States. Russia currently has the second highest number of cases.
· Russia’s coronavirus cases top 300,000 but deaths suspiciously low: ‘We conceal nothing,’ Kremlin says
Russia’s coronavirus cases surpassed 300,000 on Wednesday, cementing its position as the second-worst-hit country from the virus after the U.S., but there are increasing questions over the country’s low death toll.
Russia reported a further 8,764 coronavirus cases Wednesday, pushing its total case tally to 308,705, its coronavirus crisis center said. The death toll rose by 135 to a total 2,972 fatalities.
· Oil rises on lower U.S. stocks, firmer demand
Oil prices rallied on Wednesday after U.S. crude inventories fell in the most recent week, but gains were capped by worries over the economic fallout from the coronavirus pandemic and weak refining margins.
Oil futures have staged a recovery from recent weakness as production has declined more swiftly than expected, reducing the supply glut that caused storage to fill.
Brent crude LCoc1 settled up $1.10, or 3.2%, at $35.75 per barrel while July U.S. crude futures CLc1 ended up $1.53, or 4.8%, at $33.49.
U.S. crude inventories fell by 5 million barrels last week, Energy Information Administration data showed, while stocks at the Cushing, Oklahoma, delivery hub dropped by 5.6 million barrels.
Reference: CNBC, Reuters
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