· Dollar holds gains on optimism for economic outlook
The dollar traded near its strongest in more than two months against the euro and the yen on Thursday as pessimism about the U.S. economic outlook recedes before the release of important data on the jobs market.
The British pound held steady against the dollar and traded near an eight-month high versus the euro ahead of a Bank of England policy meeting that will publish findings on the feasibility of negative interest rates.
Sentiment for the dollar has improved recently as progress in coronavirus vaccinations, moves by U.S. President Joe Biden to pass more fiscal stimulus, and improving economic data forced some bearish investors to give up their short positions.
The dollar faces another test on Friday with the release of non-farm payrolls data, which will help confirm whether the world’s largest economy has been able to shrug off a dip in growth toward the end of last year.
Against the euro, the dollar stood at $1.2040, close to a nine-week high.
The pound bought $1.3647, stabilising after a 0.2% decline in the previous session. Sterling traded at 88.23 pence per euro, near the strongest since May last year.
The dollar was quoted at 104.98 yen, near its highest since mid-November.
Data due on Friday is forecast to show the U.S. economy added 50,000 jobs in January, which would be a mild recovery from shedding 140,000 jobs in the previous month as a spike in coronavirus infections curbed economic activity.
Since the start of the year expectations for big fiscal stimulus under Biden’s Democratic government have supported sentiment.
The pace of vaccinations in the United States has also picked up, causing many investors to temper their pessimism.
The dollar index against a basket of six major currencies stood at 91.066, not far from the highest since early December.
The Bank of England is not expected to change interest rates or quantitative easing at its meeting on Thursday, but sterling will be closely watched as investors try to measure the likelihood of negative interest rates. [nL8N2K37HN]
Elsewhere, the Australian dollar edged up to $0.7634, supported by hopes for U.S. stimulus.
Reserve Bank of Australia will update its economic forecasts on Friday, which could determine whether the Aussie continues to rise.
· Britain trial to test combining Pfizer and AstraZeneca vaccines in two-shot regimen
Britain on Thursday launched a trial to assess the immune responses generated if doses of the COVID-19 vaccines from Pfizer Inc and AstraZeneca Plc are combined in a two-shot schedule.
The British researchers behind the trial said data on vaccinating people with the two different types of coronavirus vaccines could help understanding of whether shots can be rolled out with greater flexibility around the world. Initial data on immune responses is expected to be generated around June.
The trial will examine the immune responses of an initial dose of Pfizer vaccine followed by a booster of AstraZeneca’s, as well as vice versa, with intervals of 4 and 12 weeks.
Both the mRNA shot developed by Pfizer and Biontech and the adenovirus viral vector vaccine developed by Oxford University and AstraZeneca are currently being rolled out in Britain, with a 12-week gap between two doses of the same vaccine.
· Greek PM defends centralized EU vaccine purchasing
Greek Prime Minister Kyriakos Mitsotakis defended a decision to coordinate EU member states’ vaccine purchases through the European Commission, saying the bloc’s smaller countries would have faced serious problems negotiating deals on their own.
The Commission has come under fierce criticism for its handling of the vaccination strategy and, for a damaging row with British-Swedish drugmaker AstraZeneca over a supply contract.
However Mitsotakis said the principle of centralized vaccine purchasing was the right one.
· U.S., Australia discuss China and Myanmar in first leaders call, White House says
U.S., President Joe Biden and Australian Prime Minister Scott Morrison discussed how they can work together to deal with China and a recent military coup in Myanmar, the White House said on Thursday. Australia discuss China and Myanmar in first leaders call, White House says
The first call between the leaders since Biden’s inauguration comes amid heightened tension between Australia and China and just days after Myanmar’s military seized power in a coup against the democratically elected government of Nobel laureate Aung San Suu Kyi.
· Taiwan says auto chip shortage not a main topic for coming U.S. meeting
Taiwan Economy Minister Wang Mei-hua said on Thursday the global shortage of auto chips will not be a main topic for a meeting with the United States on Friday.
The State Department has said Deputy Assistant Secretary for Trade Policy and Negotiations Matt Murray would take part in the meeting. It will be the most senior announced exchange between Taiwan and the Biden administration so far.
· Australia’s trade surplus hit 6 month high in December, despite tensions with China
Australia’s trade surplus rose to a six-month high in December as iron ore exports to China easily weathered diplomatic squalls between the two countries, while coal shipments found new buyers beyond the world’s second-largest economy.
Data from the Australian Bureau of Statistics out on Thursday showed goods exports to China jumped 21% in December to a six-month high of A$13.3 billion, with iron ore up sharply by both value and volume.
That helped Australia’s trade surplus swell to A$6.8 billion ($5.19 billion) in December, from A$5 billion the month before, as exports rose 2.8% and imports fell 2.4%.
· Pacific countries select new chief diplomat after fractious vote
A former Cook Islands prime minister was on Tuesday named the new Secretary General of the Pacific Islands Forum after marathon talks that threaten to fracture the grouping that promotes regional peace, harmony and security.
Henry Puna was named after talks stretched for more than 12 hours. He eventually defeated Gerald Zackious, the Marshall Islands ambassador to the United States, by nine votes to eight.
· JPMorgan is positive on Indonesia despite surging Covid cases in the country
JPMorgan is positive on the outlook for Indonesia, even though the country is still struggling with surging Covid infections, with the number of cases crossing one million recently.
· Oil climbs after OPEC+ maintains oil output cuts, U.S. stock draw
Oil prices extended gains on Thursday after the OPEC+ alliance of major producers stuck to a reduced output policy, and as crude stockpiles in the United States fell to their lowest levels since March last year.
Brent crude futures gained 47 cents, or 0.8%, to $58.93 a barrel, by 0317 GMT, having earlier hit their highest since Feb. 21, 2020 in the wake of the OPEC+ decision.
U.S. West Texas Intermediate (WTI) crude futures climbed 49 cents, or 0.9%, to $56.18 a barrel after reaching its highest settlement level in a year on Wednesday.
· Oil major Shell reports sharp drop in full-year profit, raises dividend
Oil giant Royal Dutch Shell on Thursday reported a sharp drop in full-year profit as the coronavirus pandemic took a heavy toll on the global oil and gas industry.
Shell reported adjusted earnings of $4.85 billion for the full-year 2020. That compared with a profit of $16.5 billion for the full-year 2019. Analysts polled by Refinitiv had expected full-year 2020 net profit to come in $5.15 billion.
For the final quarter of 2020, Shell reported adjusted earnings of $393 million, missing analyst expectations of $470.5 million.
Reference: CNBC, Reuters
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