· Dollar languishes amid pandemic aid optimism, pound meanders
The dollar languished near a 2-1/2-year low on Tuesday with demand for safe-havens flagging as U.S. lawmakers pushed forward with a Covid-19 relief package.
The House of Representatives voted on Monday to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote.
Last week’s Brexit agreement, while bare bones, also supported the outlook for global growth, lifting Asian stocks on Tuesday following Wall Street gains.
“Optimism abounds, and it’s generally coming from equity markets,” said Bart Wakabayashi, Tokyo Branch manager of State Street Bank and Trust.
“The dollar is very heavy, and that will continue into next year.”
The dollar index was little changed at 90.194 in holiday-thinned trading, hovering near the 89.723 level reached on Dec. 17 for the first time since April 2018.
Short positions on the dollar swelled in the week ended Dec. 21 to $26.6 billion, the highest in three months, according to Reuters’ calculations based on data released by the Commodity Futures Trading Commission on Monday.
The euro rose 0.1% to $1.22260 early in the Asian session, hovering near the 2-1/2-year high of 1.22735 touched earlier this month.
The dollar bought 103.740 yen, another haven asset.
Sterling rose 0.1% to $1.3477 following a two-day decline. It was as high as $1.3625 this month, a level not seen since May 2018.
Investors have taken profits in the UK currency following the confirmation last week of a Brexit trade deal that was widely expected.
While the agreement came as a relief to investors, the pact leaves Britain far more detached from the EU, analysts say.
“People are still trying to figure out what this Brexit agreement means,” weighing on the pound, said State Street’s Wakabayashi.
“Nothing has really been agreed on financial markets, and that’s a big negative for the UK.”
Bitcoin slipped 0.8% to $26,841, continuing its retreat from the all-time high of $28,377.94 set Sunday.
· U.S. might be missing the new Covid variant ‘because the holes in our net are too wide’
The lack of Covid testing capacity in the United States could mean the new, highly transmissible coronavirus strain that first emerged in the United Kingdom is already working its way through communities across the U.S.
· China says hopes EU investment deal negotiations can come to fruition at early date
· EU's Barnier says Brexit trade deal brings stability
European Union Brexit negotiator Michel Barnier said on Tuesday the trade deal struck with Britain was a relief and provided stability for people and companies.
“We’ve delivered an orderly Brexit,” Barnier told Franceinfo radio. The last-gasp deal clinched a week before the year-end deadline brought “a little stability,” he added.
Barnier said there were still some elements to define in the EU’s future relationship with Britain, including on foreign policy cooperation.
· France reports 363 Covid deaths in one day, new lockdown feared
France on Monday reported 363 Covid-19 deaths, a sign of no improvement of the epidemic situation, which has raised the perspective of a third lockdown, probably at the regional level, after holiday seasons.
The country has registered over 2.56 million cases and 63,109 deaths since the start of the pandemic, according to official data. The number of new cases dropped to 2,960 on Monday, but that is due to the closure of many scanning places during the weekend, Xinhua news agency reported.
A total of 24,678 patients are currently hospitalized for Covid-19 infection, up by 25 compared to Sunday. Meanwhile, 2,703 remain in intensive care units, up by 44.
· Russia to scale down state support for the economy in 2021
Russia will scale down its state support of the economy in 2021, eyeing rising costs on servicing burgeoning state debt in the fallout of its response to the COVID-19 pandemic and the collapse of oil prices, Finance Minister Anton Siluanov said.
Running out of options to bolster public finances, Russia has more than doubled its domestic borrowing in 2020, raised some taxes and increased state spending as it relaxed its budget rule that shields the economy from external shocks.
Russia’s extra state spending to support the economy this year reached 4.5% of gross domestic product and will shrink to 1% of GDP in 2021, Siluanov told reporters in comments cleared for publication on Tuesday.
· China kicks off emergency Covid-19 vaccination in Wuhan
The Chinese city of Wuhan, where the novel coronavirus emerged a year ago before it became a pandemic and upended life across the globe, has started the emergency Covid-19 vaccination on some key groups, a senior health official said on Tuesday, even as China is yet to officially certify its multiple vaccines.
The vaccination, available at 48 designated clinics in 15 districts, began on December 24, targeting certain groups of people aged between 18 and 59 years, He Zhenyu, Deputy Director of the centre for disease control and prevention in Wuhan, told the media in Wuhan.
· Australia’s growth may ‘never return’ to its pre-virus path after trade trouble with China, says economist
Australia’s economy has been badly hit by escalating trade tensions with China — and it’s possible growth might “never return” to its pre-virus levels even when the pandemic is over, according to research firm Capital Economics.
China is by far Australia’s largest trading partner, accounting for 39.4% of goods exports and 17.6% of services exports between 2019 and 2020, the firm said.
But Beijing has for months been targeting a growing list of imported products from Down Under — putting tariffs on wine and barley, and suspending beef imports.
Gross domestic product (GDP) in Australia could contract even more if Beijing continues to pile tariffs on more Australian imports, said its senior economist Marcel Thieliant in a note last week.
“That figure could rise to around 2.8% of GDP if China targeted other products for which it isn’t hugely dependent on Australian imports,” Thieliant said.
· Australians To Be 'fully Vaccinated' Against COVID-19 By End Of October
Australian Health Minister Greg Hunt has said that the nation's plans for the COVID-19 vaccine are ahead of schedule and the rollout is expected to be completed by the end of October. The public distribution of the vaccine in Australia is expected to begin as early as March. The government had previously said that Australians would be vaccinated by the end of 2021, although the jab against the virus will be voluntary.
According to The Guardian, Hunt said on Monday, December 28 that while the progression of the vaccine was well underway, the government’s approach was to "under-promise and over-deliver". He added that the country’s vaccine program is on track and ahead of schedule and the government expects that Australians will be fully vaccinated by the end of October on the basis that it’s free, universal, and entirely voluntary. He also urged as many Australians to be vaccinated as possible.
· First U.S. troops vaccinated in South Korea as country reports record coronavirus deaths
American troops stationed in South Korea received the first doses of coronavirus vaccine to be administered in the country on Tuesday, as health officials in Seoul reported a daily record of 40 deaths amid a surge in new cases.
Seoul plans to start its vaccinations in February, with health workers and vulnerable people first in line, but the government has been criticised for that schedule in light of vaccinations underway in the United States and European Union.
· South Korea to get Moderna's Covid-19 vaccine for 20 million people: Media
South Korea on Tuesday said it will sign a deal with Moderna to offer Covid-19 vaccines for 20 million people, Yonhap news agency reported citing the presidential office.
This comes a day after officials vowed to speed up efforts to launch a public coronavirus vaccination programme as the country detected its first cases of the virus variant linked to the rapid rise in infections in Britain.
· India finds six cases of coronavirus variant as daily infections drop
India has found six people who returned from Britain in recent weeks with a more infectious strain of the novel coronavirus that has prompted border closures around the world, even as its daily increase in cases fell to a six-month low.
· Philippines warns of unapproved Covid-19 shots as soldiers get jabs
The Philippines’ Food and Drug Administration warned against the use of unauthorized vaccines as the military said members of President Rodrigo Duterte’s security detail have already been inoculated.
Philippine regulators have not approved any Covid-19 vaccine for use in the country, FDA director general Eric Domingo said in an interview with CNN Philippines on Monday. Importing, administering or distributing vaccines without approval is illegal, Domingo said, and cautioned that unauthorized shots may be counterfeits, spoiled or causing side effects.
· Philippines to ban travel from countries with new COVID-19 variant — Duque
President Rodrigo Duterte has approved the imposition of a travel ban on countries that have registered cases of a new coronavirus variant which experts fear to be more contagious.
This was confirmed by Health Secretary Francisco Duque III who told DZRH on Tuesday that the ban, approved by the president on Monday, would take effect on December 30 at 12:01 a.m. and would remain in place until January 15.
The new coronavirus strain, which experts fear to be at least 50% more contagious first originated in the United Kingdom but has since spread to other European countries as well as Canada, Singapore, Japan and South Korea.
· Oil rises on hopes U.S. pandemic stimulus to spur fuel demand
Oil rose on Tuesday, for the third time in four sessions, on expectations for rising fuel demand as the United States may expand their pandemic aid payments and a final Brexit deal is set to stabilize trade between Europe and the UK.
Brent crude climbed 23 cents, or 0.5%, to $51.09 a barrel, as of 0410 GMT and U.S. West Texas Intermediate (WTI) crude futures added 23 cents, or 0.5%, to $47.85 a barrel.
Reference: Reuters, CNBC
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