· Dollar extends losses; Kiwi dollar hits 18-month high
The dollar extended overnight losses on Friday after data on Thursday pointed to a slowdown in the U.S. economic recovery, while riskier currencies gained, with the Aussie and Kiwi dollars up.
Data released on Thursday showed that the number of people filing new claims for unemployment benefits fell less than expected.
Homebuilding also fell, after strong gains in the previous three months.
The Japanese yen gained against the dollar, holding close to the seven-week high hit on Thursday, at 104.610 JPY=EBS.
At ts meeting, the Bank of Japan maintained its -0.1% short-term interest rate target and a pledge to cap 10-year bond yields around zero, as widely expected.
Noting that dollar-yen has passed the key 105 level, MUFG’s head of research for EMEA global markets, Derek Halpenny, wrote to clients that he expects the yen to grind higher.
The euro was up less than 0.1%, at $1.1855, set for minimal gains for the second week in a row EUR=EBS.
The pound was steady at $1.2981 and 91.285 pence per euro GBP=D3EURGBP=D3.
The currency fell sharply on Thursday when the Bank of England said monetary policymakers had been briefed on how to implement negative rates, but recovered later in the session.
The European Union’s Brexit negotiator said he thinks a Brexit trade deal with Britain is still possible.
· U.S.-China investment flows slide to nine year-low as bilateral tensions escalate
Investment between the United States and China tumbled to a nine-year low in the first half of 2020, hit by bilateral tensions that could see more Chinese companies come under pressure to divest U.S. operations, a research report said.
Investment, both direct investment by companies and venture capital flows, between the two countries fell 16.2% to $10.9 billion in January-June from the same period a year earlier - also hurt by the coronavirus pandemic, according to figures from consultancy Rhodium Group and the National Committee on U.S.-China Relations, an NGO.
· China, Japan, South Korea agree to make 'all policy efforts' to fight pandemic
Finance ministers and central bankers from China, Japan and South Korea agreed on Friday to redouble their efforts to help the region recover economically from the novel coronavirus while vowing to defend the multilateral trade and investment system.
· China begins military drills as senior U.S. official visits Taiwan
China began combat drills near the Taiwan Strait on Friday, the same day a senior U.S. official began high-level meetings in Taipei, as Beijing denounced tightening ties between Chinese-claimed Taiwan and the United States.
Beijing has watched with growing alarm the ever-closer relationship between Taipei and Washington, and has stepped up military exercises near the island, including two days of mass air and sea drills last week.
· BOJ Kuroda says will work closely with new government to combat COVID-19 pain
Bank of Japan Governor Haruhiko Kuroda said on Friday the central bank will work closely with the new government led by Yoshihide Suga to combat the pain inflicted on the economy by the coronavirus pandemic.
“Japan’s economy will likely follow an improving trend. But the pace of improvement will only be moderate as the impact of COVID-19 remains worldwide,” Kuroda said in an online seminar hosted by the Asian Development Bank.
“The BOJ will continue supporting the economy in cooperation with the new government,” he added.
· Coronavirus cases cross 5.2 million in India
The number of coronavirus cases has crossed 5.2 million in India as of Friday morning.
With 96,793 cases in the past 24 hours, the number of coronavirus cases has reached 5,212,686 in the country.
Currently, 1,018,454 are undergoing treatment at various isolation centers and hospitals. Meanwhile, 4,109,828 have returned home after treatment.
· Oil rises as Goldman predicts deficit, new storm builds in Gulf
Oil prices rose for a fourth straight day on Friday as Goldman Sachs estimated the market is in deficit and a new storm started building in the Gulf of Mexico, putting crude on track for a weekly gain of about 10%.
Brent crude LCOc1 was up 27 cents, or 0.6%, at $43.57 a barrel by 0510 GMT, while U.S. oil futures CLc1 gained 23 cents, or 0.6%, to $41.20 a barrel.
Both contracts dipped at the start of the day but have risen sharply this week after Hurricane Sally cut U.S. production and OPEC and its allies laid out steps to address market weakness.
Goldman Sachs said in a new report that recent storage on oil tankers of crude for future delivery was “driven by transient inventory allocation dynamics” rather than a rise in global stocks that would suggest the market is oversupplied.
“We estimate that the oil market remains in deficit with speculative positioning now at too low levels,” Goldman Sachs analysts said.
The investment bank predicted the market would be in a deficit of 3 million barrels per day (bpd) by the fourth quarter and reiterated its target for Brent to reach $49 by the end of the year and $65 by the third quarter of next year.
Reference: CNBC, Reuters
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