· Dollar extends rebound as investors await U.S. stimulus details, bitcoin bounces
The dollar extended its rebound from near three-year lows versus major peers on Thursday, supported by higher U.S. yields, as President-elect Joe Biden prepared to outline his plans for massive fiscal stimulus.
The dollar index held onto gains made on Wednesday in early Asian trading as investors continued to unwind bearish bets. The dollar has risen in four of the past five trading sessions as the prospect of more stimulus has weighed on U.S. government bonds, sending the benchmark Treasury yield above 1% for the first time since March.
Bitcoin also held on to 10% gains made on Wednesday as it rebounded after sliding almost $12,000 from an all-time high of $42,000 hit last week.
Biden will give details on Thursday of a plan for “trillions” of dollars in pandemic relief. The 10-year Treasury yield ticked up after CNN reported the package will be around $2 trillion, adding support for the dollar.
However many analysts expect the currency’s bounce to be temporary, as a build up of bearish dollar positions are shaken out.
Longer term, they expect more U.S. stimulus to support risk sentiment, weighing on the greenback, which is traditionally considered a safe-haven.
“I think positioning in risk assets is becoming a concern, so there could be a squeeze in the dollar near-term,” said Shusuke Yamada, chief Japan FX strategist at Bank of America in Tokyo.
“I am focusing on gradual dollar weakness in 2021.”
FX speculators have been net short the dollar since mid-March, as investors’ surging appetite for riskier assets hurt demand for the greenback.
The dollar index added 0.1% to 90.431 after gaining 0.3% overnight. It fell as low as 89.206 on Jan. 6 for the first time since March 2018.
The euro slipped 0.1% to $1.21405 after sliding 0.4% on Wednesday.
The greenback advanced 0.2% to 104.075 yen, adding to a 0.1% rise previously.
Bitcoin was little changed at $37,420 on Thursday, up from as low as $30,261.13 on Jan. 11.
Interest in the cryptocurrency has been soaring as institutional investors began buying heavily, viewing it as both an inflation hedge and as exposed to gains if it became more widely adopted.
“That precipitous sell-off we saw recently, a lot of it was driven by the futures markets,” where positions became overextended and the resulting margin calls put downward pressure on the bitcoin price, said Seth Melamed, the Tokyo-based Chief Operating Officer of cryptocurrency exchange Liquid.
“On the spot markets, you just see this consistent drumbeat of buying.”
· China reports first Covid death in more than six months as WHO investigators arrive
A woman in Hebei province died Wednesday afternoon, state media reported, noting her illness was a severe case and she had pre-existing health conditions.
Hebei reported 81 new coronavirus cases for Wednesday, bringing the number of current cases to 463.
· WHO team arrives in Wuhan as China reports first coronavirus death in months
Beijing is anxious to stamp out local clusters ahead of next month’s Lunar New Year festival when hundreds of millions of people may be on the move across the country.
· Britain allows hospitals to discharge COVID-19 patients into care homes without re-testing
· UK targets 24/7 Covid-19 vaccine delivery as death toll soars
Britain reported 1564 new deaths within 28 days of a positive test for Covid-19 on Wednesday, a record daily toll, meaning more have died in the second wave of the pandemic than the first wave last year, a health official said.
The reported daily number of deaths exceeded the 1325 recorded on 8 January and comes as Britain battles a new, more transmissible variant of the virus. The government figures showed there were another 47,525 cases, up from 45,533 new cases on Tuesday.
Britain is targeting a 24-hour, 7-day a week Covid-19 vaccination programme as soon as possible, Prime Minister Boris Johnson said, as he bids to step up the pace of the rollout with daily coronavirus deaths at record levels.
AstraZeneca executives said the company was on track to deliver 2 million doses of its shot a week by mid-February, and Johnson said increased availability would be crucial to scaling up to a round-the-clock service.
"We'll be going to 24/7 as soon as we can," Johnson told Parliament. "At the moment the limit is on supply."
· India to kick off one of the world’s largest Covid vaccination drives this weekend
India is gearing up for one of the largest mass vaccination exercises in the world starting Saturday.
The South Asian country plans to inoculate some 300 million people, or more than 20% of its 1.3 billion population, against Covid-19 in the first phase of the exercise.
Indian airlines have started delivering the first doses of vaccines to Delhi and other major cities, including Kolkata, Ahmedabad and tech hub Bengaluru, tweeted Civil Aviation Minister Hardeep Singh Puri earlier this week.
· China’s Sinovac defends Covid-19 vaccine after disappointing Brazil data
“These Phase III clinical trial results are sufficient to prove that CoronaVac vaccine’s safety and effectiveness are good around the world,” Sinovac Biotech Chairman Yin Weidong told a news conference.
Researchers in Brazil released late-stage clinical data showing efficacy that was much lower than initially announced, at just 50.4% effectiveness in preventing symptomatic infections.
The news prompted Malaysia and Singapore, which have purchase agreements with Sinovac, to say on Wednesday that they would seek more data from the Chinese firm on efficacy rates before they approved and bought supplies.
· Economists cut forecasts for Malaysia’s growth after new Covid lockdown and state of emergency
Several economists slashed their 2021 growth forecasts for Malaysia after the country announced stricter measures to contain a recent surge in Covid-19 cases.
The Malaysian government imposed an inter-state travel ban nationwide and a lockdown on six states and territories for two weeks starting Wednesday. The country’s king also declared a state of emergency that will last until Aug. 1, or earlier if Covid cases are effectively lowered.
Here are some economists who have cut their forecasts for Malaysia:
- Capital Economics, a consultancy, said the Southeast Asian country will grow 7% this year — down from its previous projection of 10%;
- Singaporean bank UOB downgraded its forecast from 6% to 5%;
- Japanese bank Mizuho lowered its projection from 6.7% to 5.9%;
- Fitch Solutions revised down its forecast from 11.5% to 10%.
Malaysia was one of the worst-performing economies in Asia last year. The International Monetary Fund in October said the Malaysian economy would shrink 6% in 2020, reversing a growth of 4.3% in the previous year.
· Biden says he hopes Senate leadership will work on other business during impeachment
· Biden to unveil new Covid stimulus plan, hopes for bipartisan support
President-elect Joe Biden is expected on Thursday to unveil his long-awaited stimulus plan.
President-elect Joe Biden is expected on Thursday to unveil his long-awaited stimulus plan, with those familiar with the legislation suggesting the transition team is hoping to draw bipartisan support for the bill in Congress.
The proposal is expected to contain several Democratic priorities, including a boost to the recently authorized $600 direct payments to most Americans, an extension of increased unemployment insurance and support for state and local governments.
A person familiar with the transition team’s thinking confirmed that Biden will try to garner bipartisan support for his relief plan.
The proposal is expected to include a boost to the recently authorized $600 direct payments to most Americans and support for local government.
Sen. Marco Rubio, R-Fla., said on Thursday he would be in favor of $2,000 stimulus checks and open to discussions with his Democratic colleagues.
· Biden’s focus on climate change could turn up the pressure on China’s mega infrastructure program
Pressure from the U.S.
Biden has said the U.S. will rejoin the Paris Climate Agreement, a global pact forged in 2015 among nearly 200 nations — including China — to fight climate change. President Donald Trump pulled the U.S. out of the agreement on Nov. 4 last year.
While campaigning for the U.S. presidency, Biden criticized China for financing dirty fossil fuel projects around the world through the Belt and Road Initiative — and essentially “outsourcing” Chinese carbon pollution to other countries.
· China urges U.S., others to stop wrongdoings after import ban on Xinjiang products
· EU companies in China should 'prepare for the worst' in digital decoupling: report
· Chinese exports grow by more than expected in December, imports rise
Chinese exports grew by more than expected in December, customs data showed on Thursday, as coronavirus disruptions around the world fuelled demand for Chinese goods even as a stronger yuan made exports more expensive for overseas buyers.
A robust domestic recovery also spurred Chinese appetite for foreign products in December, with import growth quickening from the month prior and beating expectations in a Reuters poll.
Exports rose 18.1% in December from a year earlier, slowing from a 21.1% jump in November but beating expectations for a 15% rise. Imports increased 6.5% year-on-year last month, topping a 5% forecast and picking up pace from November’s 4.5% growth.
Buoyant exports helped drive an impressive rebound in China’s manufacturing sector last year, as the pandemic wreaked havoc abroad. China is expected to be the only major economy to see positive growth in 2020. Exports grew 3.6% over the full year and imports fell 1.1%.
While the pandemic will bring challenges, a reviving global economy and a steady recovery in China’s domestic economy provide a foundation for China to maintain trade growth in 2021, said Liu Kuiwen, customs spokesman, at a briefing.
Going forward, analysts say sustained demand for medical supplies and work-from-home products from coronavirus-hit trading partners should support Chinese exports.
But some worry a rise in raw material prices and in the yuan could squeeze exporters’ profits. The onshore yuan strengthened 6.7% in 2020 -- its first annual rise in three years.
· Japan machinery orders rise, COVID emergency clouds outlook
The Cabinet Office data showed core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 1.5% in November from October, led by increased demand for chip-making equipment and computers, possibly backed by people working from home.
It was a second straight month of gains and compared with economists’ median estimate of a 6.2% drop, following a 17.1% jump in the previous month.
· Oil prices dip on virus worries; U.S. stock draw, China data check losses
Oil prices eased for a second day on Thursday as mounting coronavirus cases globally raised demand concerns, although a drawdown in U.S. crude stocks for a fifth straight week and robust data from China capped losses.
Brent crude oil futures fell 18 cents, or 0.3%, to $55.88 a barrel by 0425 GMT, while U.S. West Texas Intermediate (WTI) slipped by 11 cents, or 0.2%, to $52.80 a barrel.
· U.S. stands by Taiwan, envoy says after cancelled trip
Reference: CNBC, Reuters, RNZ
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