Dollar, yen gain on bleak Fed view and Wall Street sell-off
The safe-haven dollar, yen and Swiss franc gained on Thursday as U.S. stocks tumbled amid diminished expectations that the global economy would recover swiftly from the coronavirus pandemic.
The yen rose to a one-month high against the dollar, while the Swiss franc climbed to a fresh three-month peak.
Investors were also worried about new coronavirus infections as the world gradually reopened following shutdowns aimed at curbing the spread of the disease.
In the United States, new infections are rising slightly after five weeks of declines, according to a Reuters analysis. Part of the increase is due to more testing, which hit a record high on June 5 of 545,690 tests in a single day but has since fallen.
In afternoon trading, the dollar fell 0.3% against the yen to 106.84 yen JPY=EBS, after earlier dropping to a one-month trough.
Against a basket of currencies, =USD, however, the dollar rose 0.5% to 96.681, led by gains versus the euro. The euro dropped 0.5% to $1.1314 EUR=EBS.
· Treasury Secretary Mnuchin says ‘we can’t shut down the economy again’
Treasury Secretary Steven Mnuchin told CNBC on Thursday that shutting down the economy for a second time to combat the spread of Covid-19 isn’t a viable option and could cause even more headaches for Americans.
His comments came as Wall Street grew more concerned about a second wave of coronavirus cases in the United States. Texas has reported three consecutive days of record-breaking Covid-19 hospitalizations while nine California counties are reporting a spike in new cases or hospitalizations of confirmed cases, AP reported Wednesday.
· Total U.S. debt surges to $55.9 trillion amid big increases in corporate and government borrowing
Debt surged and household net worth tumbled in the first three months of the year as the initial impact of the coronavirus pandemic hit, according to Federal Reserve data released Thursday.
Total domestic nonfinancial debt jumped by 11.7% to $55.9 trillion, the Fed said in its quarterly statement on domestic financial accounts. Debt had increased by 3.2% in Q4 of 2019.
· U.S. jobless claims rise slower 1.54 million in early June, but layoffs still extremely high
Some 1.54 million Americans applied for traditional jobless benefits in early June and more than 700,000 sought compensation though an emergency federal program, reflecting both a steady decline in job losses from the coronavirus but a still-worrisome number of layoffs.
Initial jobless claims slowed to 1.54 million in the seven days ended June 6 from a revised 1.9 million at the end of May, the Labor Department said Thursday. The figures are seasonally adjusted.
Economists polled by MarketWatch had forecast 1.6 million new claims filed the usual way through state unemployment offices.
· British PM, top EU officials to hold talks on June 15
British Prime Minister Boris Johnson, the chairman of European Union leaders Charles Michel and the head of the European Commission Ursula von der Leyen will hold talks on June 15 to revive stalled talks on a future EU-UK relationship.
· Oil prices slump 8% as virus-related demand concerns resurface
Oil prices tumbled about 8% a barrel on Thursday, fuelled by renewed concerns about demand destruction as new cases of coronavirus tick up globally, while crude inventories hit a record in the United States.
Brent crude LCOc1 futures fell $3.18, or 7.6%, to settle at $38.55 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 fell $3.26, or 8.2%, to settle at $36.34 a barrel. Brent and WTI posted their worst daily drops since April 21 and 27, respectively.
U.S. coronavirus cases surpassed 2 million on Wednesday, according to a Reuters tally, and new infections are rising slightly after five weeks of declines. While most states have loosened restrictions on movement that shackled demand, fuel consumption remains 20% below typical levels, as consumers remain cautious.
The U.S. Federal Reserve has expressed concern that this will continue, limiting demand.
· CORONAVIRUS CRISIS:
Ø Total confirmed cases: More than 7,583,891
Ø Total deaths: At least 423,081
Ø The coronavirus COVID-19 is affecting 213 countries and territories around the world and 2international conveyances: the Diamond Princess cruise ship harbored inYokohama, Japan, and the Holland America's MS Zaandam cruise ship.
Ø US cases: At least 2,089,684 (+23,283) and deaths: 116,029 (+899)
Ø Brazil cases: At least 805,649 (+30,465) and deaths: 41,058 (+1,261)
Ø Russia cases: At least 502,436 (+8,779) and deaths: 6,532 (+174)
Ø Thailand cases: At least 3,125 and deaths: 58
Reference: CNBC, Reuters, Market Watch
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