· Safe-haven dollar looks to end week strong as market jitters persist
The dollar edged higher on Friday, heading for a weekly gain, as lingering jitters about a coordinated assault on hedge fund short positions in the United States boosted demand for safe-haven assets.
The greenback has benefited from safety buying since the start of the week, when investors fretted that President Joe Biden’s fiscal spending package will not be as large as the proposed $1.9 trillion.
At the same time, Covid-19 vaccine rollouts globally have been running into trouble. In Europe, production delays have snowballed into a spat between the European Union and drugmakers over how best to direct the limited supplies available.
“The caution in the market’s mind hasn’t gone away,” said Shusuke Yamada, a currency strategist at Bank of America in Tokyo. “The dollar and other haven currencies will see some demand for the time being.”
“The more medium-term question is what U.S. fiscal policy will do to U.S. interest rates, Fed policy, and therefore the U.S. dollar,” he added.
The dollar index gained 0.2% to 90.757 in the Asian day, bringing its weekly rise to 0.6%.
The greenback advanced 0.3% to 104.52 yen, another traditional safe-haven, adding to the previous day’s gains of about 0.2%.
The euro declined 0.2% to $1.20955.
The U.S. currency, as measured by the dollar index, has broadly rebounded since dipping to three-year lows at the start of this month on the view that last year’s decline ran too far too fast.
However, many analysts expect the greenback to return to the downward trend that saw it lose nearly 7% of its value last year as the new U.S. government implements massive fiscal spending while the Federal Reserve maintains its ultra-easy monetary policy.
· China stocks end week lower on liquidity worries, but post monthly gain
China stocks recorded a weekly loss of more than 3% on Friday, as worries over tight liquidity conditions dented sentiment, although they posted monthly gains on increasing hopes of an economic recovery.
The blue-chip CSI300 index ended 0.5% lower at 5,351.96, while the Shanghai Composite Index shed 0.6% to 3,483.07.
For the week, CSI300 dropped 3.9%, while SSEC declined 3.4%.
But, for January, the CSI300 was up 2.7%, while SSEC eked out 0.3%, as more investors poured money into the country’s mutual funds that invest in equities.
· Australia needs to stand its ground against Chinese pressure, former Prime Minister Turnbull says
Australia needs to stand its ground and defend its interests in the face of mounting pressure from China, former Prime Minister Malcolm Turnbull said Friday.
“From our point of view, we have to recognize that what is going on at the moment is a pressure play to effectively compel, coerce Australia to be more compliant,” Turnbull told CNBC’s “Squawk Box Asia,” as part of the network’s coverage of the Davos Agenda.
“It’s entirely instrumental – the indignation and the rage and the fury you see in places like The Global Times are all entirely calculated and instrumental,” he said, adding that all Australia has to do is stand its ground and “defend our values, defend our interests and demonstrate that bullying and coercion will not work.”
Turnbull explained that in its dealings with China, Australia has to “recognize there are boundaries of trust, there are some areas where collaboration and cooperation will flow very, very freely.”
· Carrie Lam hopes Biden administration will give Hong Kong’s national security law ‘a fair hearing’
Hong Kong leader Carrie Lam told CNBC on Thursday that she’s “optimistic” the new U.S. administration under President Joe Biden will give her government “a fair hearing” with regard to the city’s controversial national security law.
The law was imposed in Hong Kong last year by the Chinese central government in Beijing — bypassing the city’s lawmakers. The Trump administration criticized the move, which became one of the issues at the center of worsening U.S.-China ties.
Lam, however, denied that Hong Kong is a sticking point between the two economic powers. Instead, she said the U.S. sometimes used the city as a “pawn” in its dealings with China.
· Japan's factories extend output declines in December as recovery stalls
Japan’s industrial output extended declines in December as factories struggled with a hit to demand from expanded COVID-19 lockdown measures globally, suggesting the economic recovery was slowing.
The output slowdown may fan worries that the world’s third-largest economy has failed to secure a firm footing after last year’s sharp recession as businesses are pressured by a wider, local state of emergency covering parts of the country, including Tokyo.
· S.Korea's Passenger Vehicle Export Falls 12.1 Pct In 2020
South Korea's passenger vehicle export posted a double-digit fall last year due to weak global demand, caused by the COVID-19 pandemic, customs office data showed Friday.
Passenger car export declined 12.1 percent over the year to 34.7 billion U.S. Dollars in 2020, according to the Korea Customs Service.
Overall market demand reduced last year, but global demand rebounded in the second half.
· Singapore to give financial aid to people affected by vaccine
Singapore will grant financial assistance to people who suffer serious side effects related to the Covid-19 vaccine in a bid to boost confidence among those being inoculated.
More than 113,000 people have received their first dose of the Pfizer-BioNTech vaccine as of Jan. 27, the city-state’s health ministry said in a statement. Over 50 individuals have received the second dose and completed the full vaccination regimen.
An individual will receive a one-time pay-out of as much as S$10,000 ($7,517) in case of hospitalisation, needing care in high dependency or intensive care unit, but subsequently recovers from “medically significant serious” side effects.
A person will receive S$225,000 in case of death or permanent severe disability as a result of the Covid-19 vaccination. People who have serious side effects after the jabs can also continue to get support through applicable healthcare plans.
· Vietnam coronavirus outbreak spreads to Hanoi as nine more cases confirmed
Vietnam reported nine more new COVID-19 infections early on Friday as the country’s first outbreak for nearly two months spread to Hanoi, the capital, where the ruling Communist party is currently holding its key five-yearly congress.
· Oil steady as supply cuts offset demand worries on stalled vaccine rollouts
Oil prices were steady on Friday, sticking to ranges seen over the past three weeks, as investors looked for signs of changing supply and demand fundamentals.
A cut in Saudi Arabia’s oil supply and lower U.S. oil stocks helped offset price pressures from fuel demand, which is slowing due to stalled vaccine rollouts and contagious new coronavirus strains.
Brent crude futures for March rose 4 cents, or 0.1%, to $55.57 a barrel at 0520 GMT, after falling 0.5% in the previous session.
The Brent March contract expires on Friday. The more active April contract rose 13 cents, or 0.2%, to $55.23.
U.S. West Texas Intermediate (WTI) crude futures slipped 7 cents to $52.27 a barrel, after falling 1.0% on Thursday.
Reference: Reuters, CNBC
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