· Dollar rises vs yen, franc; risky currencies rally as traders stop taking profits
The U.S. dollar rose against the safe-haven Japanese yen and Swiss franc on Friday as stocks on Wall Street rallied from their worst one-day performance in three months, while the euro dropped against the greenback, erasing early gains.
The yen fell against the dollar for the first time in five sessions, while the Swiss franc declined, as Wall Street rallied to claw back some of the sharp losses suffered in the prior session.
Going into next week, investors are bracing for a number of key events, including discussions on the European Union recovery fund, Brexit negotiations, Bank of England and Swedish National Bank meetings. Federal Reserve Chair Jerome Powell’s semi-annual testimony to the Senate banking committee is also scheduled next week.
The euro fell 0.6% to $1.1228, sliding from $1.1422, the three-month high it reached on Wednesday. The dollar index, meanwhile, climbed 0.5% to 97.33, after earlier hitting a one-week high.
The British pound weakened on data showing Britain’s economy shrank by a record 20.4% in April from March as the country spent the month in a tight coronavirus lockdown. Investors saw the number as likely the bottom of the crash before what is expected to be a long and slow recovery.
Sterling was last down 0.9% at $1.2487 and was slightly lower versus the euro.
The dollar showed little reaction to U.S. economic data on import prices and consumer sentiment released on Friday.
· U.S. consumer confidence rises; COVID-19, unemployment shadow lingers
U.S. consumer sentiment perked up in early June as households cheered the reopening of businesses and a surprise rebound in hiring, though they did not expect a significant improvement in the economy amid fears of a resurgence in COVID-19 infections.
The survey from the University of Michigan on Friday is broadly in line with economists’ expectations that the recovery from the recession would be a long slog. The National Bureau of Economic Research, the arbiter of U.S. recessions, declared on Monday that the economy slipped into recession in February.
The University of Michigan’s consumer sentiment index increased to a reading of 78.9 from 72.3 in May. It said “few consumers anticipate the reestablishment of favorable economic conditions anytime soon.” Two-thirds of consumers in the survey expected “bad times financially” during the year ahead, while half anticipated a “renewed downturn.”
· Fed's Powell pledges focus on return to strong labor market
U.S. Federal Reserve Chair Jerome Powell on Friday reiterated his pledge to do what he can to bring the U.S. labor market back to its pre-coronavirus strength, particularly given the pandemic’s fierce impact on the nation’s minorities and its poor.
Powell made the remarks in a report released on Friday detailing findings from 15 community outreach events the Fed held across the country over the past year, part of a review of its monetary policy framework that is still continuing.
· Trump open to another coronavirus relief package: White House
U.S. President Donald Trump is open to another economic relief package in response to the coronavirus pandemic and remains in favor of a payroll tax holiday, White House spokeswoman Kayleigh McEnany said on Monday.
“There are several things he wants, a payroll tax holiday was one of them, because that directly advantages low-income workers,” McEnany said at a media briefing.
· EU state aid regulators to ease bailout rules for small firms, startups
EU competition regulators plan to loosen the bloc’s state aid rules to make it easier for private investors to team up with EU governments to bail out virus-hit start-ups and small companies, and also to allow aid to firms struggling even before the pandemic.
The European Commission said on Friday it would amend its rules to allow private investors to help recapitalise start-ups and small companies, including those in which the state holds a stake.
It said incentives would be provided to private investors to encourage them to take part and to lighten the burden on state coffers.
· Risk of new lockdowns rises with fear of second COVID-19 wave
Fears of a second wave of COVID-19 infections shut six major food markets in Beijing on Friday, while India, which opened up this week, recorded a record daily increase and half a dozen U.S. states said their hospital beds were filling up fast.
Health officials worldwide have expressed concerns in recent days that some countries grappling with the devastating economic impact of lockdowns may lift restrictions too swiftly, and that the coronavirus could spread during mass anti-racism protests.
· Record spikes in new coronavirus cases, hospitalizations sweep parts of U.S.
New coronavirus cases and hospitalizations in record numbers swept through more U.S. states, including Florida and Texas, as most push ahead with reopening and President Donald Trump plans an indoor rally in Tulsa, Oklahoma.
Alabama reported a record number of new cases for the fourth day in a row on Sunday. Alaska, Arizona, Arkansas, California, Florida, North Carolina, Oklahoma and South Carolina all had record numbers of new cases in the past three days, according to a Reuters tally.
Many state health officials partly attribute the increase to gatherings over the Memorial Day holiday weekend in late May.
· Coronavirus hitting the Americas hardest says World Health Organization
The Americas are bearing the brunt of the global coronavirus pandemic at present, the World Health Organization (WHO) said on Friday, with North and South America currently having four of the 10 worst hit countries in the world.
The disease was “highly active” in Central and South America, the WHO’s top emergency expert Mike Ryan said, highlighting problems in Brazil and Mexico.
The current situation in Brazil, now one of the global hot-spots for the virus, was of increasing concern especially in heavily-populated cities, he told a press conference.
· Beijing steps up coronavirus measures as dozens of cases emerge from a food market
After weeks with almost no new coronavirus infections, Beijing has recorded dozens of new cases in recent days, all linked to a major wholesale food market, raising concerns about a resurgence of the disease.
The capital is taking steps to try to halt the outbreak including ramping up testing. On Sunday night Beijing ordered all companies to supervise 14-day home quarantine for employees who have visited the Xinfadi market or been in contact with anyone who has done so.
A restaurant chain selling traditional Beijing noodles shut down a few outlets after two employees tested positive.
· China demands proof from U.S. senator for COVID-19 accusation
China on Monday challenged U.S. Senator Rick Scott to show evidence supporting his accusation that Beijing is trying to slow down or sabotage the development of a COVID-19 vaccine by Western countries.
“Since this lawmaker said he has evidence that China is trying to sabotage western countries in their vaccine development, then please let him present the evidence. There’s no need to be shy,” Chinese foreign ministry spokeswoman Hua Chunying said at a daily briefing in response to the Republican senator’s comments to BBC TV.
Scott declined to give details of the evidence when asked during the interview on Sunday but said it had come through the intelligence community.
· Trump says he will 'do other things' if he loses 2020 election
U.S. President Donald Trump said he will go on to other things if he loses the Nov. 3 election, after Democratic opponent Joe Biden said the Republican might cheat and refuse to leave the White House.
“Certainly if I don’t win, I don’t win. I mean, you know, go on and do other things,” Trump told Fox News Channel in a television interview broadcast on Friday.
As the race between Trump and Biden heats up ahead of the election, the two have increasingly asserted that the other side intends to cheat their way to victory.
Biden, who is leading Trump in most national polls, earlier this week said his greatest concern was that Trump would try to “steal” the election, though the former vice president did not elaborate on how he thought Trump might cheat. Biden said he is confident soldiers would escort Trump from the White House if he loses and does not recognize the result.
· Oil posts worst week since April, snaps 6-week winning streak
Oil was little changed on Friday and headed for a first weekly fall since April as new U.S. coronavirus cases spiked, stoking fears of a second wave of the virus hitting fuel demand.
West Texas Intermediate settled 8 cents lower at $36.26 per barrel, while Brent crude gained 18 cents to settle at $38.73.
The oil benchmarks were heading for weekly declines of around 8%, their first after six weeks of gains that have lifted prices off April lows.
Fears that the coronavirus pandemic may be far from over has brought the rally to a halt, with about half a dozen U.S. states reporting spikes in new infections.
· North Korea warns of retaliatory actions over defectors in South
The sister of North Korea’s leader has warned of retaliatory measures against South Korea that could involve the military, in the latest escalation of tensions over defectors from the North who have been sending back propaganda and food.
· South Korea says North Korea should honour agreements
South Korea’s Unification Ministry on Sunday said North Korea should honor past agreements signed between the two countries, a day after Pyongyang warned of retaliatory measures against the south that could involve the military.
“The South and the North should try to honour all inter-Korean agreements reached,” the ministry said in a statement.
Reference: Reuters, CNBC, Worldometers
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