· Dollar halts slide as Treasury Secretary Mnuchin calls time on emergency funds
The dollar halted its slide on Friday after U.S. Treasury Secretary Steven Mnuchin called an end to some of the Federal Reserve’s pandemic lending, derailing a risk rally and surprising investors who had counted on central bank support.
The announcement damped a previously positive mood after reports that U.S.
Senate Republican and Democrat leaders had agreed to resume negotiations on another coronavirus stimulus package.
While Mnuchin’s move was aimed at re-appropriating some $455 billion allocated to Treasury under the CARES Act in the spring for other spending, some investors were concerned about ending programs that they think have played a vital role in reassuring markets.
The dollar index stood at 92.306, off Thursday’s low of 92.236, though it is still down 0.3% on the week.
The euro fetched $1.1874, flat on the day but not far from this week’s high of $1.18935 touched on Tuesday and up 0.3% on week.
The yen stood at 103.80 per dollar, retaining its weekly gain of 0.8%.
The currency changed hands at $1.3258. Against the euro, it stood at 0.8955 pound per euro, wiping its gains made over the past two days.
Outside the dollar index basket currencies, the Australian dollar, which is sensitive to economic sentiment, stood little changed at $0.7284, having erased most of its gains this week.
The offshore Chinese yuan was flat at 6.5716 to the dollar after hitting a 2 1/2-year high of 6.5318 on Wednesday.
Elsewhere, bitcoin retained its bullish tone, trading at $17,971, near a three-year high touched on Wednesday.
· Mnuchin decision cuts Fed lending power, but sources say emergency programs can be revived
Treasury Secretary Steve Mnuchin’s decision to allow several of the Fed’s emergency lending programs to expire on Dec. 31 will dramatically reduce the central bank’s ability to backstop the financial system. But people familiar with the situation say the Fed will still have considerable lending power in the event of a shock to the system.
Mnuchin issued a letter Thursday saying he would not extend the Fed’s programs that used Congress’ CARES Act funds. Created in response to the financial panic that accompanied the lockdowns in the spring, those programs gave the Fed the ability to lend up to $4.5 trillion into various financial markets. Mnuchin argued it was the intent of Congress for the funds to expire.
The Fed, in an unusual statement, made public its disagreement with the decision, saying, “The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”
· U.S. travel restrictions with Canada, Mexico extended through Dec. 21
U.S. non-essential travel restrictions across its borders with Canada and Mexico will be extended through Dec. 21 due to COVID-19, U.S. Acting Homeland Security Secretary Chad Wolf said on Thursday.
"In order to continue to prevent the spread of COVID, the US, Mexico, & Canada will extend the restrictions on non-essential travel through Dec 21. We are working closely with Mexico & Canada to keep essential trade & travel open while also protecting our citizens from the virus," Wolf tweeted.
The border restrictions were first implemented on March 21.
More than 11.6 million confirmed COVID-19 cases have been reported in the United States, with over 251,000 deaths, according to the latest data from Johns Hopkins University. Enditem
· Argentina plans to vaccinate 10 mn against Covid by Feb
Argentina's government is planning to vaccinate 10 million people, nearly a quarter of the population, against Covid-19 in the first two months of 2021, President Alberto Fernandez said.
"Argentina has a vaccination capacity of approximately 5 million people per month, with which we could vaccinate 10 million between January and February, giving priority to healthcare, security and elderly people with prevalent diseases," state news agency Telam cited Fernandez as saying in an interview with local radio station FutuRock.
· Thailand’s economic recovery may be the slowest in Southeast Asia, Nomura says
The coronavirus pandemic and ongoing political protests have left Thailand’s economy in “pretty bad shape,” an economist told CNBC this week.
“We know that it is very reliant on tourism and that sector has been decimated by the Covid-19 shock,” said Euben Paracuelles, chief Asean economist at Nomura.
The “last thing” Thailand needs is something to weaken its recovery — and the protests do just that, with direct implications on spending.
· Oil prices little changed, on track for third straight weekly gain
Oil prices were little changed on Friday, on track for a third consecutive weekly rise, but demand concerns stemming from surging coronavirus cases and renewed lockdowns in several countries capped gains.
Prospects of an effective COVID-19 vaccine and hopes that OPEC and its allies will keep production in check have bolstered oil markets this week.
Brent crude LCOc1 futures were up 2 cents, or 0.05% at $44.22 a barrel by 0730 GMT.
The more active U.S. West Texas Intermediate (WTI) January crude contract CLc2 dipped 4 cents to $41.86 a barrel. The WTI contract for December CLc1, which expires on Friday, was down 3 cents at $41.71 per barrel.
Reference: CNBC, Reuters
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