· British pound drops as Brexit impasse unsettled after leaders meet
The British pound lost about 0.5% on Thursday after British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed they have until Sunday to take a “firm decision” about the future of trade talks.
The European Commission and Britain remained “far apart” on the Brexit trade deal, the bloc’s chief executive said after what she described as a “lively” dinner with the British Prime Minister.
Bank of England Governor Andrew Bailey has warned a no-deal Brexit would cause longer-term damage to Britain’s economy than the Covid-19 pandemic, and the impact of the change might be felt for decades.
The British pound dropped to as low as $1.3311 and last stood at $1.3345, down 0.4% on the day, though it stayed above this week’s low of $1.3225 set on Monday.
The U.S. dollar, which tends to fall when risk appetite is strong, held firm against other major currencies as an agreement on U.S. stimulus remains elusive as proposals and counterproposals on Covid-19 aid have flown around the U.S. Capitol.
The dollar index stood at 91.029, off Friday’s 2.5-year low of 90.471.
The dollar rose slightly to 104.28 yen.
The euro slipped to $1.2082, after four straight days of losses and down about a cent from its 2 1/2-year high of $1.2177 touched on Friday.
Also curbing appetite for the common currency, the European Central Bank is widely expected to expand its stimulus measures to prop up the recession-hit currency bloc at its policy meeting later on Thursday.
ECB President Christine Lagarde has made clear in recent weeks that a bigger Pandemic Emergency Purchase Program (PEPP) and more subsidized long-term loans for banks will form the backbone of its policy measures.
Elsewhere, the Australian dollar stepped back to $0.7435 from Wednesday’s high of $0.7485, a 2 1/2-year high, while the offshore Chinese yuan also hovered below its 2 1/2-year high set on Wednesday to trade at 6.5279 per dollar.
Bitcoin was last up 1.7% at $18,622.
· EUR/USD Forecast: Bearish correction gains speed ahead of the ECB meeting
US dollar rises during the American session as risk sentiment deteriorates.
European Central bank meeting on Thursday likely to trigger volatility.
EUR/USD breaks under 1.2100 and opens doors to further losses. The EUR/USD pair dropped again on Wednesday, accelerating to the downside after breaking under 1.2100. A deterioration in risk sentiment and higher US yields boosted the dollar that rose across the board. The pair approached again 1.2150 before turning lower, hitting at 1.2057, the lowest level in a week. The VIX jumped during the American session, and mains indexes in Wall Street ended lower, falling from near record-high levels. Market participants focus on the lack of agreement between the United Kingdom and the European Union and limited expectations about more stimulus in the US. The key event on Thursday is the European Central Bank meeting. Actions from the central bank are expected. The announcement and Lagarde’s words will likely trigger volatility. In the US, economic data to be released includes jobless claims and inflation.
EUR/USD short-term technical outlook
The EUR/USD pair found support around the 1.2060 zone and looks set to consolidate between the mentioned level and 1.2100. The euro needs to recovers levels above 1.2115 to strengthen. The key short-term resistance stands at 1.2150.
Technical indicators are pointing lower in the 4-hour chart, suggesting an extension of the current correction lower. A key support is located between 1.1960 and 1.2000. On the upside, the euro failed again to break 1.2150 on Wednesday: a consolidation above would improve the outlook for the euro.
Support levels: 1.2040 1.2000 1.1960
Resistance levels: 1.2095 1.2135 1.2155
· Facebook faces U.S. lawsuits that could force sale of Instagram, WhatsApp
Facebook Inc could be forced to sell its prized assets WhatsApp and Instagram after the U.S. Federal Trade Commission and nearly every U.S. state filed lawsuits against the social media company, saying it used a “buy or bury” strategy to snap up rivals and keep smaller competitors at bay.
· UK GDP growth slows in October as Covid hit services
Britain’s economic recovery almost ground to a halt in October against a backdrop of rising coronavirus cases that dealt a blow to the hospitality sector, official figures showed on Thursday.
Gross domestic product rose 0.4% on the month, the Office for National Statistics said, in line with forecasts in a Reuters poll for growth to slow from 1.1% in September.
Britain has Europe’s highest death toll from COVID-19, with more than 62,000 fatalities, and also suffered the biggest economic hit of any major economy after GDP shrank by an unprecedented 19.8% in the second quarter of this year.
Although the economy initially picked up rapidly after the initial shock of the lockdown, it lost momentum as COVID cases started to rise again in September.
· UK-EU leaders set Sunday deadline for Brexit talks, after meeting fails to break the deadlock
The U.K. left the EU in January but it agreed to keep the same standards and regulations until the end of the year, so both sides would have time to develop new trading arrangements. However, this transition period ends in three weeks and there are serious concerns that they will not have a new agreement ready by then.
· Britain signs free trade deal with Singapore as it prepares to end transition out of EU
Britain said it was re-emerging as a major trade force as it signed a free trade deal with island nation Singapore on Thursday, its latest agreement globally as it prepares to end its transition out of the European Union on Dec. 31.
· China revokes visa exemptions for U.S. diplomat passport holders visiting Hong Kong, Macau
China is revoking visa exemption treatment for United States diplomat passport holders visiting Hong Kong and Macau, Chinese foreign ministry spokeswoman Hua Chunying said at a news conference in Beijing on Thursday.
China will also implement reciprocal sanctions against some U.S. officials, members of Congress, personnel at non-governmental organisations, and their family members, over their actions on Hong Kong, Hua said.
The United States on Monday imposed financial sanctions anda travel ban on 14 Chinese officials over their role in adoptinga national security law for Hong Kong and Beijing’s disqualification last month of elected opposition legislators inHong Kong.
· China to impose temporary anti-subsidies on Australian wine imports from Dec. 11
China will temporarily impose anti-subsidy fees on some Australian wine imports from Dec. 11, the commerce ministry said on Thursday, ramping up pressure on the industry amid rising Australia-China political tensions.
Import operators bringing in wine being investigated to determine whether it has benefited from Australian subsidies will need to pay deposits to China’s customs authority, according to the statement.
Australia was aware of the decision, trade minister Simon Birmingham’s office said, but declined to make any further comment to Reuters after China’s announcement.
China in August launched an investigation into Australian wine subsidy schemes upon a request from the China Wine Industry Association. Last month, it began imposing anti-dumping tariffs of 107.1% to 212.1% on wine imported from Australia after a separate anti-dumping probe.
· The number of new coronavirus infections in Japan’s capital have topped 600 in a day for the first time.
Experts on Tokyo’s virus task force say the surge in infections has placed an added burden on hospitals, making it difficult for many of them to carry out treatment for ordinary patients.
Tokyo reported 602 new cases Thursday, while the daily tally for the entire nation was 2,810. Japan has reported 168,573 infections since the pandemic began, with 2,465 deaths.
Tokyo Gov. Yuriko Koike is urging residents to avoid non-essential outings, especially senior citizens and their families. Tokyo has issued a request for drinking places to close early until Dec. 17.
· Oil edges up on vaccine release, concern over Iraq oilfield attack
Oil prices edged up on Thursday, buoyed by a COVID-19 vaccine rollout in Britain and the imminent approval of a vaccine in the United States that could spur a rebound in fuel demand, while a large build in U.S. crude stocks last week held gains in check.
U.S. West Texas Intermediate (WTI) crude futures rose 14 cents, or 0.3%, to $45.66 a barrel at 0706 GMT, while Brent crude futures climbed 12 cents, or 0.3%, to $48.98 a barrel. Prices were little changed overnight.
Reference: CNBC, Reuters, WFTV9.com
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