· Dollar headed for weekly loss, bitcoin hits record $49,000
The dollar headed for its first losing week in three as new signs of weakness in the U.S. jobs market dented investor expectations about the pace of economic recovery from the pandemic.
Bitcoin hit a new all-time high of $49,000 on Friday after BNY Mellon became the latest firm to embrace cryptocurrencies, saying it will form a new unit to help clients hold, transfer and issue digital assets.
“With names like BONY getting in, it’s going to lay the groundwork for even more mainstream adoption of bitcoin,” said Jeffrey Wang, head of Americas at crypto finance service provider Amber Group.
“Medium term, the momentum is very strong and the market is going to want to test $50,000.”
The dollar remained on the back foot on Friday in Asia, pinned near two-week lows, after the release of weaker-than-expected weekly U.S. jobless claims data the previous day.
That added to recent concerns that the dollar’s previous rally had priced in too fast a pace of rebound for the U.S. economy.
The dollar index edged up less than 0.1% to 90.49 in holiday-thinned trade due to the Lunar New Year, and was on track to fall 0.6% for the week.
There has been a divergence in views among traders this year over just how U.S. President Joe Biden’s planned $1.9 trillion fiscal stimulus package will affect the dollar.
Some see it as bolstering the currency as it should speed a U.S. recovery relative to other countries, while others reckoned it would feed a global reflation narrative that should lift riskier assets at the dollar’s expense.
The euro slipped less than 0.1% to $1.2122, consolidating for a third day near that level as it headed for a 0.6% weekly advance.
The dollar was mostly flat at 104.795 yen, down 0.5% from the end of last week.
Bitcoin last traded 1.7% weaker at $47,170 after trading at a record high of exactly $49,000.00 on Bitstamp.
The world’s most popular cryptocurrency is on course for a nearly 22% weekly advance, its biggest since the period ended Jan. 3.
· UK economy shrank by 9.9% in 2020, its largest contraction on record
The U.K. economy contracted by 9.9% in 2020, as the coronavirus pandemic ravaged economic activity.
In the final quarter of the year, gross domestic product (GDP) grew by 1%, according to the Office for National Statistics, as the country re-imposed nationwide lockdown measures in a bid to combat a resurgence of Covid-19 cases.
· U.S. House committee approves another $14 billion for pandemic-hit airlines
· If Senate does not convict Trump, 'he can do this again,' Democrats warn
Democratic prosecutors making the case that Donald Trump incited a deadly insurrection by encouraging his supporters to march on the U.S. Capitol warned the Senate on Thursday that if it fails to convict the former president, “he can do this again.”
· Dr. Scott Gottlieb says vaccine ramp up alone probably won’t be enough to manage UK virus variant
An increase in vaccinations in the coming weeks in itself might not be enough to contain the spread of a coronavirus variant that was first reported in the United Kingdom in December and has now appeared in the U.S, said Scott Gottlieb, former commissioner of the Food and Drug Administration.
The United Kingdom first reported the strain known as B117 to the World Health Organization in December, and now there are 971 cases of it in 37 U.S. states, according to the Centers for Disease Control and Prevention.
· UK economy shrank by 9.9% in 2020, its largest contraction on record
The U.K. economy contracted by 9.9% in 2020, as the coronavirus pandemic ravaged economic activity.
In the final quarter of the year, gross domestic product (GDP) grew by 1%, according to the Office for National Statistics, as the country re-imposed nationwide lockdown measures in a bid to combat a resurgence of Covid-19 cases.
· EU says it is ready to work with Biden administration to settle trade disputes
The European Union on Thursday acknowledged a move by the new U.S. government to refrain from imposing additional tariffs on EU goods in a long-running dispute over aircraft tariffs, and said it was ready to work to resolve trade disputes.
· Russia says it is ready to cut EU ties if hit with painful sanctions
Russian Foreign Minister Sergei Lavrov has said Moscow is ready to sever ties with the European Union if the bloc hits it with painful economic sanctions, according to extracts of an interview posted on the ministry’s website on Friday.
Relations between Russia and the West have come under renewed pressure over the arrest and jailing of Kremlin critic Alexei Navalny, which has sparked talk of possible new sanctions.
· Euro zone in double-dip recession, recovery risks to downside: Reuters poll
The euro zone economy is in double-dip recession amid lockdown restrictions due to a resurgence in coronavirus cases, according to a Reuters poll of economists, who said the risks to their already weak outlook was skewed more to the downside.
Given delays to the European Union’s vaccine roll-out and concerns about new coronavirus variants supporting current lockdowns, stalled economic activity and rising unemployment pose a serious threat to any expected recovery.
· Merkel promises lockdown will not last a day longer than necessary
Chancellor Angela Merkel urged Germans on Thursday to have a little more patience after agreeing with regional leaders to extend a coronavirus lockdown until March 7 and said restrictions would not last a day longer than necessary.
· Australian Open tennis tournamen to continue without crowds after the state of Victoria announces five-day lockdown
· Melbourne in new lockdown, bars fans from Australian Open
· Yoshiro Mori resigns as president of the Tokyo Olympic organizing committee after sexist remarks
· Tokyo Olympics chief quits, apologises again over sexist remarks
Tokyo 2020 Olympics chief Yoshiro Mori resigned on Friday and again apologised for his sexist remarks that sparked a global outcry, leaving the troubled Olympics searching for a chief five months from the start.
· Japan to suffer bigger-than-expected slump in first quarter amid pandemic curbs: Reuters poll
Japan’s economy will suffer a much bigger contraction than initially expected in the January-March quarter, as an extended state of emergency to contain the coronavirus pandemic hurt corporate and household spending, a Reuters poll found.
· First batch of Pfizer vaccine arrives as Japan eyes Sunday approval
The health ministry is planning to move ahead with formal approval of the coronavirus vaccine developed by U.S. pharmaceutical giant Pfizer Inc. on Sunday, sources familiar with the matter said Thursday.
The Health, Labor and Welfare Ministry had intended to approve the Pfizer COVID-19 vaccine on Monday. With the acceleration of its administrative procedures, the government is considering starting vaccinations on Wednesday for around 20,000 doctors and nurses who have consented to receive the shots, the sources said.
· Myanmar ruler calls for end to protests as U.S. imposes sanctions
Myanmar’s new junta leader on Thursday called on civil servants to return to work and urged people to stop mass gatherings to avoid spreading the coronavirus, as a sixth day of protests against him and his coup rocked the country.
Washington announced a first round of sanctions, while European Union lawmakers called on their countries to also take action against the military leadership and Britain said it was considering measures to punish the Feb. 1 takeover.
Myanmar military frees prisoners, urges civil servants not to protest
Myanmar's military has pardoned 23,369 prisoners including 55 foreigners, state media reported Friday, with its leader urging civil servants to stop joining public protests and return to work, as demonstrations continue across the country.
· Oil's losses deepen as OPEC, IEA caution ends rally
Oil prices fell a second day on Friday, extending losses after OPEC cut its demand forecast and the International Energy Agency said the market was still over-supplied.
Brent crude was down 47 cents, or 0.8% at $60.67 a barrel by 0309 GMT, having dropped half a percent the previous session. U.S. oil was down 53 cents, or 0.9% at $57.71 a barrel, after falling by 0.8% on Thursday.
Both benchmarks closed on Wednesday at their highest levels since January 2020 after a nearly record-setting run of consecutive daily gains.
· Analysis: Iran oil output faces race against time as U.S. sanctions linger
Iran’s oil reserves risk becoming stranded assets unless the new U.S. administration eases sanctions that have left the country lagging rivals in output capacity and losing a race against time as the transition to low carbon energy gathers pace.
Iran, which sits on the world’s fourth-largest oil reserves, relies heavily on oil revenue, but sanctions have prevented it from pumping at anywhere near capacity since 2018.
The penalties were tightened under former U.S. president Donald Trump and although the new President Joe Biden is more conciliatory, top officials in his administration have said Washington would not take a quick decision on any deal with Iran.
Iran’s leadership says sanctions have only delayed the moment when it will produce the oil in its vast reserves - and that the world will eventually need it.
But the increasing pace of the global energy transition to lower carbon fuels, combined with the impact of the COVID-19 pandemic on energy demand, have brought forward forecasts for when the world will hit peak demand - the point beyond which consumption will permanently fall.
· Brent Oil: A rally to $70 is technically possible – ABN Amro
This week, Brent Oil prices broke through the technical resistance level of $60/barrel within the upward trend channel. As a result, the multiyear downward trend was broken. Technically, a rally to $70/barrel is possible. ABN AMRO revises up oil price forecasts, but the $50-60/barrel trading range remains the base scenario.
“If investors start to feel that the upward movement is coming to an end, profit-taking on the extensive long positions could trigger a severe downward price correction. We, therefore, believe that the risks to the oil price are mainly on the downside.”
“We have also adjusted the oil price somewhat for 2022 and 2023. Again, we still see the $50-60 range. However, the price could rise slightly as a result of the expected economic recovery once the lockdowns ease.”
Reference: CNBC, Reuters, FX Street
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