· U.S. coronavirus deaths top 100,000 as country reopens
The novel coronavirus has killed more than 100,000 people in the United States, according to a Reuters tally on Wednesday, even as the slowdown in deaths encouraged businesses to reopen and Americans to emerge from more than two months of lockdowns.
Globally, coronavirus cases have topped 5.6 million with over 350,000 deaths since the outbreak began in China late last year and then arrived in Europe and the United States. South America is now bearing the brunt of the outbreak, with Brazil having the second-highest number of cases in the world.
· Dollar treads water against euro; yuan sinks on US-China tensions
The dollar steadied against the euro on Wednesday even as the common currency remained supported by news of a proposal for an economic recovery package to help the euro zone region recover from the coronavirus pandemic.
The euro was up 0.03% against the dollar at $1.09855, after rising as high as $1.10315, its strongest since April 1. The common currency gained 0.8% on the greenback on Tuesday.
The European Union’s executive unveiled a 750 billion euro ($825.23 billion) plan on Wednesday to prop up economies hammered by the coronavirus crisis, hoping to end months of squabbling over how to fund a rec
The euro has struggled since falling in March, when investors rushed for the safety of dollars amid increased volatility in global financial markets.
Perceived safe-haven currencies, the Japanese yen and the Swiss franc, came under pressure on Wednesday as investors looked past increased U.S.-China tensions to bet on riskier assets in the hopes of a quick rebound from the economic hit from the coronavirus pandemic.
Against the yen, which tends to draw investors during times of geopolitical or financial stress given Japan’s status as the world’s largest creditor, 0.13the dollar was 0.11% higher.
The greenback was up 0.3% against the franc, after Swiss National Bank Chairman Thomas Jordan said Swiss monetary policy must remain accommodative.
Worries about the U.S. response to China’s proposed security law for Hong Kong, however, kept safe-haven currencies from seeing sharper declines.
U.S. Secretary of State Mike Pompeo said he had certified on Wednesday that Hong Kong no longer warrants special treatment under U.S. law as it did when it was under British rule, a potentially big blow to its status as a major financial hub.
The offshore yuan fell to its lowest level ever against the against at 7.1966 per dollar.
The Chinese yuan has weakened considerably in recent days, as U.S.-China tensions reignite and investors weigh the uncertainty over Beijing’s proposed a new national security law for Hong Kong.
There is “value” for the Chinese currency at these current levels, according to Barings’ Head of Greater China Investments, Khiem Do.
“For the next 12 months, we believe that the yuan will trade somewhere between 6.8 against the U.S. dollar to 7.2,” Do told CNBC’s “Street Signs” on Wednesday.
Sterling retreated below $1.23 as investor focus shifted back to the possibility of negative interest rates in Britain and comments from government officials that not much progress had been made in Brexit negotiations.
· House sends China sanctions bill to Trump’s desk as tensions escalate
The House of Representatives on Wednesday passed legislation calling for sanctions against Chinese officials for the detention and torture of Uighur Muslims in the country’s western region of Xinjiang as tensions between the U.S. and China continue to escalate.
The legislation was approved by a vote of 413-1 after passing overwhelmingly in the Senate earlier this month. It will now head to President Donald Trump, who has not said whether he intends to sign it into law.
The vote was the first to take place under temporary rules established this month to allow representatives to cast their ballots by proxy, as a precaution against the spreading coronavirus. Republicans have brought a suit against Democratic House Speaker Nancy Pelosi challenging proxy voting as unconstitutional.
The vote comes just hours after Secretary of State Mike Pompeo targeted Beijing over its efforts to tamp down on dissent in Hong Kong, announcing that the State Department no longer viewed Hong Kong as autonomous and reiterating U.S. support for anti-government protesters there.
China has warned that it will retaliate against any sanctions imposed and denies the allegations of abuse inside its reeducation camps, which are believed to house as many as a million Uighurs, ethnic Kazakhs and members of other minority groups.
The bill passed on Wednesday would give the president 180 days to put together a list of Chinese officials responsible for abuses. Those officials would then face sanctions, though Trump could exempt certain individuals if he claims that the exemption is in the national interest.
· E.U. proposes $825 billion coronavirus rescue plan giving Brussels power to raise money for first time
European Union leaders on Wednesday proposed an $825 billion coronavirus rescue plan that would give Brussels major new tax and spending powers of the sort held by a federal state.
Proponents are calling it Europe’s “Hamiltonian moment,” after the 1790 agreement, engineered by Treasury Secretary Alexander Hamilton, that transformed the United States from a loose confederation of former colonies into a true federation with a central government.
If approved, the E.U. plan could bind the bloc together at a moment when it seemed at risk of spinning apart under the pressure of the novel coronavirus pandemic. If the plan fails — either to win support or to deliver benefits — euroskeptic politicians could be emboldened, both in rich nations such as Germany and struggling ones such as Italy.
The E.U. plan would allow the bloc to raise money centrally and then redistribute it — something it has never done before. Brussels would offer $550 billion in the form of grants to member countries hit hardest by the economic fallout from the virus. The remainder of the aid would be in the form of loans with strings attached, which more closely mirrors measures of the past.
· Oil drops more than 4% in second negative session in three on U.S.-China tensions
Oil futures tumbled on Wednesday after U.S. President Donald Trump said he was working on a strong response to China’s proposed security law in Hong Kong and as some traders doubted Russia’s commitment to deep production cuts.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman agreed during a telephone call on further “close coordination” on oil output restrictions, the Kremlin said.
“It sounds great on paper, but the market is holding back excitement until we get a few more details about whether there will be cuts, how many barrels will be cut, and the length of the cuts,” said Phil Flynn, senior analyst at Price Futures Group.
Brent crude fell $1.43, or 3.95%, to settle at $34.74 a barrel, while West Texas Intermediate crude settled $1.54, or 4.48%, lower at $32.81 per barrel.
Meanwhile, tensions between the U.S. and China continued to rise after China announced plans to impose new national security legislation on Hong Kong, prompting protests in the street.
Gloomy forecasts over the economic impact of the pandemic also weighed on crude.
Reference: Reuters, CNBC, Washington Post, Worldometers
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