· Dollar on back foot as Biden optimism bolsters riskier currencies
The dollar declined versus major peers on Thursday as optimism that new U.S. administration’s massive stimulus package will bolster growth sapped demand for safe-haven currencies.
Riskier commodity currencies were supported as Asian stocks followed U.S. equities in rising to new records after Joe Biden, who has laid out plans for a $1.9 trillion pandemic relief package, was sworn in as president.
“Risk sentiment is quite positive right now and we expect it to remain so this year, with growth expected to rebound quite strongly,” said Shinichiro Kadota, senior currency strategist at Barclays Capital in Tokyo.
The Canadian dollar and Norwegian crown are likely to outperform, while European currencies lag, he said.
The greenback should also strengthen this year against the euro as the United States recovers faster than most other countries, he added.
The U.S. currency slipped 0.2% to C$1.2611 in Asia, declining for a third day. It touched a three-year low at C$1.2607 overnight, after the Bank of Canada opted not to cut interest rates.
The dollar slid 0.4% to 8.456 Norwegian crowns, also a third day of declines.
The Aussie dollar rose 0.4% to 77.74 U.S. cents, adding to a 0.7% rally in the previous session. Australia boasted another solid rise in employment in December, data released Thursday showed.
North of the border, the Bank of Canada said Wednesday that the arrival of a COVID-19 vaccine and stronger foreign demand is brightening the economic outlook in the medium term, opting to hold its key overnight interest rate at 0.25%. Money markets had been watching the prospect of a so-called micro rate cut of less than 25 basis points.
The dollar lost 0.2% at 103.59 yen on Thursday, another safe haven currency, after dipping to a two-week low of 103.33.
The Bank of Japan kept monetary policy unchanged on Thursday while revising up its economic forecast for next fiscal year.
The euro gained 0.2%, reversing a similar decline from the previous session, to trade at $1.2135.
The European Central Bank also decides policy Thursday, with no change expected.
European countries are struggling to contain the novel coronavirus amid worries that a new variant could lead to more stringent lockdowns and more economic pain.
The dollar index slipped 0.2% to 90.268, declining for a third day since touching a nearly one-month high of 90.956 on Monday.
The greenback started the year on a firmer footing, supported by a rise U.S. Treasury yields in response to Biden’s plan for massive stimulus.
But many analysts expect a return to the dollar downtrend that saw it lose nearly 7% in 2020 amid expectations U.S. monetary policy would stay ultra-loose and hopes for a post-pandemic global recovery.
· 'No evidence of decline' in COVID-19 rates in England's third lockdown
A third pandemic lockdown appears to be having little impact on rates of COVID-19 in England, researchers warned on Thursday, with prevalence of the disease “very high” and “no evidence of decline” in the first 10 days of renewed restrictions.
· Italian research finds diuretic drugs promising for COVID-19 treatment
A group of researchers from the University of Bari said their studies showed an ingredient of diuretic drugs, traditionally used to treat high blood pressure, is promising in halting the impact of the coronavirus in patients.
The findings, which were published in the peer-reviewed MDPI (Multidisciplinary Digital Publishing Institute) academic journal last week, showed that ethacrynic acid, the main component of some diuretic pharmaceuticals, can be an "effective inhibitor" of the coronavirus.
Though the research is preliminary, the journal said the data "can be the starting point for the development of an effective therapeutic strategy" against COVID-19, the disease caused by the coronavirus.
· Indian PM Modi to get COVID-19 vaccine in 2nd phase of inoculation drive: NDTV
Indian Prime Minister Narendra Modi will get a coronavirus shot in the second phase of the country’s inoculation campaign, broadcaster NDTV reported on Thursday citing sources, as many states struggle to meet targets partly due to fears over possible side-effects.
· Hong Kong set to grant approval for Pfizer coronavirus vaccine shot: Media
Hong Kong is set to grant emergency approval for the Pfizer-BioNTech coronavirus vaccine, the South China Morning Post (SCMP) reported, citing an unidentified government source.
The move would mark the first approval for any Covid-19 vaccine in the city, and clear the way for inoculations to begin as Hong Kong seeks to stamp out a winter outbreak. The shot could be approved by the government this week, the SCMP report said.
· No question the Biden administration has to appear ‘very tough’ on China, former Singapore diplomat says
The Biden administration will likely maintain tough rhetoric against China, a former Singapore diplomat said Wednesday.
But it remains to be seen if the administration would listen to other countries in the region before implementing its policies towards Beijing, Kishore Mahbubani, now a distinguished fellow at the National University of Singapore’s Asia Research Institute, told CNBC’s “Squawk Box Asia.”
U.S.-China relations worsened significantly under President Donald Trump as the two superpowers fought a trade war and are competing for technological superiority. In some instances, the U.S. sought to bring countries to its side against China. But in Asia, particularly Southeast Asia, Beijing’s economic and political influence remains strong.
“The critical thing here is will the Biden administration listen to the countries of the region before they implement any policy towards China?” Mahbubani said. He explained that if the Biden administration starts listening, it would discover that there is a very strong consensus in East Asia.
· Brexit responsible for food supply problems in Northern Ireland, Ireland says
Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.
British ministers have sought to play down the disruption of Brexit in recent days.
The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.
· Twitter says it locked account of China's U.S. embassy over Xinjiang-related tweet
Twitter has locked the account of China’s U.S. embassy for a tweet that defended China’s policies in the Xinjiang region, which the U.S. social media platform said violated the firm’s policy against “dehumanization”.
The Chinese Embassy account, @ChineseEmbinUS, posted a tweet this month that said that Uighur women were no longer “baby making machines,” citing a study reported by state-backed newspaper China Daily.
The tweet was removed by Twitter and replaced by a label stating that it was no longer available. Although Twitter hides tweets that violate its policies, it requires account owners to manually delete such posts. The Chinese embassy’s account has not posted any new tweets since Jan. 9.
· Trading platform IG to buy U.S. brokerage tastytrade for $1 billion
London-listed trading platform IG said it plans to buy online brokerage tastytrade for $1 billion, as it ramps up its presence in the United States after a stellar year for the industry due to coronavirus-driven market volatility.
The deal consideration would be made through $300 million in cash and the issuance of 61 million IG shares, the company said on Thursday.
· BOJ lifts next year's growth forecast, saves ammunition as virus risks linger
The Bank of Japan kept monetary policy steady on Thursday and upgraded its economic forecast for next fiscal year, but it warned of escalating risks to the outlook as new coronavirus emergency measures threatened to derail a fragile recovery.
Policymakers, however, signaled they have delivered sufficient stimulus for now to cushion the blow from the COVID-19 pandemic.
In fresh quarterly projections, the BOJ upgraded next fiscal year’s growth forecast to a 3.9% expansion from a 3.6% gain seen three months ago based on hopes the government’s huge spending package will soften the blow from the pandemic.
· Wanted: Communist Party leadership to keep Vietnam in sweet spot amid U.S.-China tensions
Vietnam’s ruling Communist Party gathers for a congress next week that will help shape the country’s global role for the next five years, selecting new leaders and setting policy as tensions bubble with Beijing and Joe Biden settles in at the White House.
· Joe Biden signs order to revoke Keystone XL permit, Canada disappointed
US President Joe Biden on Wednesday (local time) signed an executive order that revokes a key permit for the controversial Keystone XL pipeline.
This is a devastating blow to the approximately 1,200-mile-pipeline that carried oil from Canada to the US, The Hill reported.
· Oil dips after surprise rise in U.S. crude stocks; focus on Biden, stimulus
Oil slipped on Thursday after industry data showed a surprise build in U.S. crude inventories that reignited pandemic-led demand concerns, but stimulus hopes in the United States capped the downturn in prices.
U.S. West Texas Intermediate (WTI) crude futures dipped 19 cents, or 0.4%, to $53.12 a barrel at 0725 GMT, following two days of gains on expectations of massive COVID-19 relief spending under new U.S. President Joe Biden.
Brent crude futures were down 16 cents, or 0.3%, to $55.92 a barrel.
Reference: CNBC, Reuters, pbs.org
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