· Dollar loiters near two-week low after soft U.S. inflation
The dollar was pinned near two-week lows through a holiday-thinned Asia session on Thursday, after soft U.S. inflation and another Federal Reserve promise to keep rates low reinforced expectations of meagre returns from the reserve currency.
The Australian dollar sat just below a two-week top touched overnight, while the euro held at $1.2119, near its highest since Feb. 1.
Sterling, also boosted by receding expectations for negative interest rates in Britain, sat just shy of Wednesday’s nearly three-year peak of $1.3865.
Moves were slight and trade was lightened by Lunar New Year holidays in Japan and China. Against a basket of currencies the dollar sat at 90.387 after touching a two-week trough of 90.249 in the wake of U.S. inflation figures.
U.S. core inflation last month was zero, data showed on Wednesday, against market expectations of 0.2%.
In a speech, Fed Chair Jerome Powell focused on still-high unemployment and reiterated that the central bank’s new policy framework could accommodate annual inflation above 2% for some time before hiking rates.
The dollar had pared some of its losses against other majors a little bit after a selloff in U.S. tech stocks dampened financial markets’ upbeat mood. The safe-haven Japanese yen hit a two-week peak of 104.41 per dollar overnight and last traded a fraction softer at 104.59 per dollar.
Bitcoin, sometimes viewed as a hedge against inflation, has dropped about 7% from Tuesday’s record high and traded at $44,786 on Thursday.
Inflation is under the spotlight as economists expect pent-up demand and a low-base effect from last year’s shocks to drive jumps in headline figures by the spring time, which some investors think could test the Fed’s resolve.
· Yellen eyes innovation to battle misuse of cryptocurrencies, narrow digital gaps
U.S. Treasury Secretary Janet Yellen on Wednesday warned about an “explosion of risk” from digital markets, including the misuse of cryptocurrencies, but said new financial technologies could also help fight crime and reduce inequality.
In remarks to a financial sector innovation roundtable, Yellen said such technologies could be used to stem the flow of dark money from organized crime and fight back against hackers, but also to reduce digital gaps in the United States.
· Cramer calls on U.S. to build factories to address chip shortage, unemployment
CNBC’s Jim Cramer said Wednesday that the United States should fund the development of a chipmaking compound in efforts to address both the nation’s high unemployment rate and a chip shortage that’s affecting American businesses.
· Biden raises concerns with Chinese president in first official phone call
President Joe Biden spoke with Chinese President Xi Jinping by phone Wednesday evening for the first time since taking office, according to the White House.
According to a White House statement, Biden raised his “fundamental concerns” about Beijing’s “coercive and unfair economic practices, crackdown in Hong Kong, human rights abuses in Xinjiang, and increasingly assertive actions in the region, including toward Taiwan.”
· U.S. to look at more restrictions on tech exports to China
The Biden administration will look at adding “new targeted restrictions” on certain sensitive technology exports to China in cooperation with allies, a senior official said on Wednesday ahead of the new president’s first call with China’s leader Xi Jinping.
The U.S. will also not move to lift Chinese trade tariffs imposed by the Trump administration before it has conducted “intense consultation and review” with allies, the official told reporters during a briefing.
· China-U.S. confrontation a disaster for both countries, Xi tells Biden
· Taiwan, U.S. hold first Washington meeting under new administration
· Taiwan expresses 'admiration' for Biden concern in Xi call
Taiwan’s government expressed its thanks to and “admiration” for U.S. President Joe Biden on Thursday after he told his Chinese counterpart Xi Jinping of his concerns about Beijing’s pressure against the island China, which claims as its own territory.
Biden’s government, which took office on Jan. 20, has moved to reassure democratic Taiwan that its commitment to them is “rock solid”, especially after China stepped up its military activity near the island shortly after Biden’s inauguration.
· India, China agree to pull back troops from disputed Himalayan lake
· Iran produces uranium metal, IAEA says, in latest breach of deal
Iran has carried out its plan to produce uranium metal, the U.N. atomic watchdog confirmed on Wednesday, despite Western powers having warned Iran that would breach their 2015 nuclear deal as uranium metal can be used to make the core of an atom bomb.
· Double masking, better mask fit can reduce Covid exposure, CDC study finds
· Britain's 'Kent' coronavirus variant will sweep the world - UK genetic surveillance chief
The coronavirus variant first found in the British region of Kent is likely to sweep around the world and the battle with the virus is going to go on for at least a decade, the head of the UK’s genetic surveillance programme said.
· Hong Kong holds scaled-down Lunar New Year fairs amid COVID-19, China crackdown
· Oil drops after strong rally, demand hopes limit losses
Oil prices fell on Thursday, giving up some of the recent strong gains on profit-taking and speculation that the market’s strength could tempt producers like Saudi Arabia to reduce output by less.
Brent crude fell 40 cents, or 0.7%, to $61.07 a barrel, as of 0350 GMT, after touching its highest since January 2020 on Wednesday, after a strong run in recent days driven by the Organisation of Petroleum Exporting Countries and its allies, known as OPEC+, agreed output cuts and vaccine rollouts fired up hopes of a recovery in demand.
U.S. crude slid 35 cents, or 0.6%, to $58.33 a barrel.
Crude stocks last week fell for a third straight week, dropping 6.6 million barrels to 469 million barrels, their lowest since March, according to the Energy Information Administration. Analysts in a Reuters poll had forecast a 985,000-barrel increase.
Reference: CNBC, Reuters
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