· Dollar bounces as Fed outlook frightens investors
The dollar bounced against riskier currencies and the safe-haven yen hit a one-month high on Thursday as the U.S. Federal Reserve’s dour economic outlook spooked investors.
The moves recouped the greenback’s initial losses after the Fed’s policy stance, projecting rates near zero for years, was welcomed as a sign of its continued support for asset prices.
Sterling GBP= fell 0.6% to $1.2666 and there were losses from the export-exposed South Korean won KRW=, which fell half a percent, to the oil-sensitive Norwegian krone NOK= which dropped about 1%.
Against a basket of currencies =USD the dollar erased Tuesday losses to sit at 96.437.
The euro - which hit a three month peak overnight - put up the best fight of the majors, sliding only 0.4%, leaving open the possibility of more downside to come for the dollar once the dust settles. The single currency EUR= last bought $1.1333.
Markets are looking ahead to U.S. jobless claims data due at 1230 GMT.· U.S. weekly jobless claims seen declining further, but millions still unemployed
Layoffs in the United States are abating, but millions who lost their jobs because of COVID-19 continue to draw unemployment benefits, suggesting the labor market could take years to heal from the pandemic even as businesses resume hiring workers.
The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy’s health, will follow news last Friday of a surprise 2.5 million increase in nonfarm payrolls in May. It could reinforce views that the labor market has weathered the worst of the turbulence.
The Federal Reserve signaled on Wednesday it would provide years of extraordinary support for the economy, with policymakers projecting a 9.3% unemployment rate at year end. The unemployment rate has jumped from 3.5% in February and was at 13.3% in May.
New applications for state unemployment benefits likely totaled a seasonally adjusted 1.55 million for the week ended June 6, down from 1.877 million the prior week, according to a Reuters survey of economists. That would pull initial claims further away from a record 6.867 million in late March.
But claims for jobless benefits would still be more than double their peak during the 2007-09 Great Recession.
· France's Montchalin: EU must reach deal on coronavirus relief plan by July
The European Union must reach a deal on a proposed 750 billion euro economic recovery plan to cope with the impact of the coronavirus crisis by July, French Junior European Affairs Minister Amelie de Montchalin said on Thursday.
“There is no other solution than having a deal by July. If we do not have a stimulus plan, we will have a problem,” Montchalin told BFM Business radio.
The European Commission’s recovery plan aims to help economically weaker countries hit hardest by the coronavirus.
· French minister hopes for French auto industry recovery in June, July
France should speed up its gradual return to work and business activity, as the country emerges from lockdown measures imposed to tackle the coronavirus crisis, French Finance Minister Bruno Le Maire said on Thursday.
“I want economic activity to resume more quickly,” Le Maire told LCI television.
The French economy is expected to contract by 11% in 2020.
French Finance Minister Bruno Le Maire told LCI television on Thursday that he hoped the country’s automobile industry, which has been hit hard by the coronavirus crisis, would report stronger figures over the months of June and July.
Earlier this month, Renault (RENA.PA) finalised a 5 billion euro ($5.7 billion) loan with the French government, strengthening the carmaker’s finances in the wake of the coronavirus pandemic.
· China auto sales up for second straight month after almost two-year slump
China’s auto sales in May rose 14.5% from the same month a year earlier, industry data showed on Thursday, the second consecutive month of increase as the world’s biggest vehicle market recovers from lows hit during coronavirus lockdowns.
The result followed a 4.4% rise in April and a 43% drop in March, when the pandemic pummelled demand. Before April, sales had suffered an almost two-year slump.
· Oil prices drop on concerns about patchy demand recovery, record U.S. stocks
Oil prices fell by about 4% on Thursday on worries about slow demand growth as coronavirus cases rise, with U.S. crude stockpiles hitting an all-time high and the U.S. Federal Reserve saying recovery from the pandemic could take years.
Brent crude LCOc1 futures fell 3.4%, or $1.42, to $40.31 a barrel by 0600 GMT, erasing Wednesday’s gains. Earlier in the session, Brent was down as much as $1.53, or 3.7%.
U.S. West Texas Intermediate (WTI) crude CLc1 dropped 4%, or $1.60, to $38 a barrel, after being down earlier as much as $1.69, or 4.3%.
· Trump says campaign rallies to resume, Oklahoma likely first
President Donald Trump said on Wednesday he will begin staging campaign rallies again soon with the first one likely in Tulsa, Oklahoma, as he seeks to rebound from a drop in opinion polls after his much-criticized handling of the coronavirus pandemic and mass protests against police brutality and racism.
Reference: CNBC, Reuters
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