· Dollar nurses losses after jobs data mars recovery narrative; sterling buoyant
The U.S. dollar paused on Friday after its biggest loss in 10 days as disappointing U.S. labour market data bruised optimism for a speedy recovery from the COVID-19 pandemic.
The greenback continued to buck its traditional role as a safe-harbour currency, falling in sympathy with U.S. stocks overnight after an unexpected increase in weekly jobless claims soured the economic outlook.
The British pound traded near an almost three-year high reached overnight, when it surged the most in more than a month, amid Britain’s aggressive vaccination programme.
The dollar index was little changed at 90.561 in the Asian session, after a 0.4% decline overnight cut short a two-day winning streak. For the week, the gauge is now back to more or less break-even.
The string of soft labour data is weighing on the dollar even as other indicators have shown resilience, and as President Joe Biden’s pandemic relief efforts take shape, including a proposed $1.9 trillion spending package.
Sterling was mostly flat at $1.3965 on Friday following a 0.8% jump in the previous session, when it rose as high as $1.3986 for the first time since April 2018.
The euro was little changed at $1.2093 after rising 0.4% overnight.
The dollar bought 105.555 yen, little changed following a two-day retreat from the five-month high of 106.225 reached Wednesday.
Many analyst expect the dollar to weaken over the course of the year as it has traditionally done during times of global economic recovery, though it might take some time to develop.
In cryptocurrencies, bitcoin traded at $51,335.71, consolidating for a second day after hitting a record $52,640 on Wednesday in a rally fuelled by endorsements from Tesla Inc and others. It has risen about 78% so far in 2021, after more than quadrupling last year.
Smaller rival ethereum rose to a record $1,951.89 on Friday, just pipping the previous day’s high, before trading at $1,909.41. It has surged some 162% this year.
On Thursday, chipmaker Nvidia Corp announced a new processor designed specifically for mining ethereum.
· Bitcoin is 'economic side show' and poor hedge against stocks: JP Morgan
Bitcoin is an “economic side show” and a poor hedge against a decline in equity prices, analysts at JP Morgan said in a sobering assessment that could undercut the cryptocurrency’s rise to record highs.
Current prices are well above JP Morgan’s estimates of fair value and the mainstream adoption of bitcoin increases its correlation with cyclical assets, which reduces the benefits of diversifying into bitcoin, the investment bank said in a memo.
· Biden to debut at G7 with vaccines, economy and China in focus
U.S. President Joe Biden will attend his first meeting with Group of Seven leaders on Friday to discuss plans to defeat the coronavirus, reopen the battered world economy and counter challenges posed by China.
· The Swiss canton of Zug has started accepting tax payments in cryptocurrency.
In a previous announcement in 2020, the Swiss authorities said that, from February, citizens and companies based in Zug will be able to pay up to 100,000 CHF (around $111,300) of their taxes in either bitcoin (BTC, -0.02%) or ether (ETH, +1.47%). No partial payments in cryptocurrency will be accepted.
· UK retail sales slump in new lockdown, borrowing less than expected
Retail sales volumes fell 8.2% compared with December, a far bigger fall than the 2.5% decrease forecast in a Reuters poll of economists and the second largest on record after the fall in April 2020, at the start of the pandemic.
· CHINA'S CENTRAL BANK INJECTS LIQUIDITY INTO MARKET
China’s central bank pumped cash into the financial system through open market operations on Thursday to maintain liquidity in the market.
A total of 200 billion yuan (about $31 billion) was injected into the market via medium-term lending facility (MLF), according to the People’s Bank of China, the central bank, the Xinhua news agency reported.
The funds will mature in one year at an interest rate of 2.95 per cent. The operation included a rollover of MLF funds that matured on Thursday, the central bank said.
Meanwhile, the central bank injected 20 billion yuan into the market through seven-day reverse repos at an interest rate of 2.2 per cent.
· China reveals 4 soldiers killed in June 2020 border clash with India
China said for the first time on Friday four Chinese soldiers died during a bloody Himalayan border clash with Indian troops in June 2020, adding that the men were given posthumous awards.
Chen Hongjun, Chen Xiangrong, Xiao Siyuan and Wang Zhuoran died during what Chinese state media described as a “fierce struggle” against “foreign troops” that violated an agreement and crossed into the Chinese side.
· Japan January factory output to rise for first time in three months: Reuters poll
Japan’s industrial production likely grew for the first time in three months in January as manufacturing activity picked up globally, a Reuters poll found on Friday, offering a glimmer of hope for an economy battered by the coronavirus pandemic.
Analysts expect the economy in the current quarter to shrink as a local state of emergency in some areas, including Tokyo, to contain coronavirus cases hit businesses and consumers.
Japan’s factory output was projected to have risen 4.0% in January from the previous month, the poll of 18 economists showed on Friday, rebounding from a revised 1.0% fall in December.
· Biden’s return to the Iran nuclear deal is getting harder by the day as Tehran’s deadline approaches
Iran and the U.S. are in a standoff.
President Joe Biden’s administration wants to revive the 2015 nuclear deal, but is demanding to see changes from Tehran before it will lift the heavy sanctions imposed on the country by the Trump team.
Meanwhile, Iran says it wants Washington to step up its game and make the first move, refusing to budge until those sanctions are lifted.
Iran has set a deadline of Sunday, Feb. 21, vowing that if oil and banking sanctions are not lifted by then, it will block the U.N.’s inspectors from being able to access its nuclear facilities.
The political brinkmanship raises questions over Biden’s plans to salvage a deal which has effectively been on life support since former President Donald Trump pulled the U.S. out of it in 2018.
· Myanmar protester shot in the head last week has died, brother says
A young woman protester in Myanmar who was shot in the head last week as police tried to disperse a crowd died on Friday, her brother said.
· Pfizer/BioNTech coronavirus vaccine 85% effective after first dose, study finds
The Pfizer/BioNTech vaccine is up to 85% effective after the first dose, according to a new Israeli study.
The study, carried out by the country’s largest hospital, looked at the effectiveness of the first dose of the vaccine in 7,000 healthcare employees.
The Sheba Medical Centre research found there was an 85% reduction in the number of people developing symptomatic Covid-19 between 15 and 28 days after the jab.
Including asymptomatic cases, there was a 75% drop in infections.
· The second dose of Covid vaccine is needed for complete immunity, infectious disease specialist Dr. Paul Offit says
The second dose of Covid-19 vaccine is crucial in creating longer and complete immunity as well as preventing variants of the virus, according to Dr. Paul Offit, director of the Vaccine Education Center at Children’s Hospital of Philadelphia.
· Brazil vaccinates everyone over 90 against COVID-19: report
Brazil has vaccinated everyone over 90 years of age against COVID-19 and more than 70 percent of its healthcare workers, local media reported on Thursday citing an official source.
According to the Attorney General's Office (AGU), which released the document, the government said everyone over 60 years of age residing at a care home and people with disabilities who have been institutionalized have also been vaccinated.
· Africa COVID deaths surpass 100,000 amid second wave
· Japan finds more than 90 cases of new Covid-19 virus strain — media
Japanese health authorities have found more than 90 cases of a new strain of the COVID-19 virus, the Mainichi newspaper reported on Friday.
The variant is believed to have come from overseas but is different from strains that originated in Britain and South Africa, according to the report which cited Japan's National Institute of Infectious Diseases.
· Indonesia reports 9,039 new COVID-19 cases, 181 new deaths
The confirmed COVID-19 cases in Indonesia increased by 9,039 in the past 24 hours to 1,252,685, with the death toll adding by 181 to 33,969, the Health Ministry said on Thursday.
According to the ministry, 10,546 more patients were discharged from hospitals, bringing the total number of recoveries from the coronavirus epidemic to 1,058,222.
· India virus infections at three-week high, Mumbai hires marshals to enforce mask-wearing
India reported on Friday its biggest jump in new coronavirus infections in three weeks, with 13,193 cases, while thousands of marshals fanned out to enforce mask wearing across the financial capital of Mumbai, which is battling a recent spurt.
· Oil prices have been trading higher in recent sessions until an energy crisis and freezing weather hit the U.S.
During Asian trading hours Friday, U.S. crude slipped 1.49% to $59.62 a barrel. But since November, the price has risen almost 69%.
As of Thursday, global benchmark Brent last traded down 1.25% to $63.13. Similarly, Brent has also risen some 68% since November.
Commonwealth Bank has set a price target of $65 per barrel for oil prices by the end of the year, which Dhar said was already looking like a low forecast.
“The expectations of a Covid-19 vaccine is certainly very positive for oil,” he said. “Around two-thirds of oil consumption is tied to mobility and transportation, so, anything which is positive news on the Covid-19 front has an enormous positive impact on oil prices and oil demand expectations.”
He added that the decision made by oil producers to hold supply steady as well as to reduce some supplies has allowed energy prices to rally.
“Demand is certainly pivotal but the supply side has proven very, very structurally supportive. That’s been the reason why this oil price rally could even surpass our forecast and hit $70 by the end of the year,” Dhar said.
Reference: CNBC, Reuters, Xinhua, Theedgemarkets, LBC
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