· Dollar slipped on improved risk sentiment after Fed indicated low interest rates will remain
The U.S. dollar slipped to three-year lows against the British pound and antipodean currencies on Wednesday as the promise of extended easy monetary conditions globally boosted investor appetite for riskier assets.
The New Zealand dollar dipped briefly before rallying to the highest since April 2018 after the country’s central bank emphasized patience over the timing of exiting ultra-easy policy settings.
Money flowed from safe havens like the dollar toward currencies that are expected to benefit from a pick-up in global trade, and to countries like Britain that are bouncing back quickly from the coronavirus pandemic.
The dollar index against a basket of six major currencies was at 90.111, hovering near the six-week low of 89.941 it reached overnight.
The Australian dollar, which tends to benefits from rising metal and energy prices, jumped to a three-year high of $0.7945 before paring gains to trade 0.1% stronger at $0.7914.
The New Zealand dollar rose as high as $0.7384, following an knee-jerk dip, after the Reserve Bank of New Zealand (RBNZ) expressed some caution about the outlook, potentially disappointing traders who expected the monetary authority to acknowledge a recent improvement in economic data.
The British pound rose 0.3% to $1.4158 after earlier touching $1.4295 for the first time since April 2018.
The outlook for sterling has brightened as investors cheer Britain’s rapid coronavirus vaccination program and its plans to ease lockdown restrictions on economic activity.
The euro bought $1.21495, close to the one-month high of $1.2180 set overnight.
The dollar managed to rise against other traditional haven currencies, adding 0.2% to 105.485 Japanese yen and hitting an almost three-month high against the Swiss franc .
In the cryptocurrency market, bitcoin recovered to trade above $50,000 following a sharp plunge this week from its record high of $58,354.14 reached Sunday.
Square said on Wednesday it had invested $170 million in the digital asset in the fourth quarter, but some analysts still argue that bitcoin’s recent surge was excessive.
Rival digital currency ether rebounded from its own steep sell-off to trade up slightly at $1,618.
· U.S. House plans vote on COVID-19 aid bill on Friday
The U.S. House of Representatives will vote on Friday on legislation to provide $1.9 trillion in new coronavirus relief, Representative Steny Hoyer, the chamber’s No. 2 Democrat, said.
“The American people strongly support this bill, and we are moving swiftly to see it enacted into law,” Hoyer said on Twitter on Tuesday.
The House Budget Committee approved the measure on Monday. Passing more relief to ease the economic effects of the pandemic is a top priority of Democratic President Joe Biden.
Although polls show Americans want more economic support, Democrats - who narrowly control Congress - and Republicans differ sharply over how best to provide it.
· JPMorgan says rising bond yields are ‘healthy signs’ and may benefit Asia
A recent spike in bond yields spooked global markets, but JPMorgan Private Bank says it may be a reflection of “growth optimism” as the global economy bounces back from the coronavirus pandemic.
“If you think about rising bond yield(s) or stronger growth, or even a little bit more inflation at this point in the cycle — these are healthy signs,” Julia Wang, executive director and global market strategist at the firm, told CNBC’s “Street Signs Asia” on Tuesday.
“I think that the global economy is going through this cyclical recovery phase and a rising bond yield (is) very much a reflection ... of this growth optimism,” Wang said.
Much of this optimism is expected to be “realized” in Asia this year, which is seeing a “really strong” growth impulse, the strategist said.
“If you think about where we are with cyclical growth, the spillover from U.S. fiscal policy will be quite meaningful for Asian exporters,” Wang said. “We also have some commodity exporters here in Asia, they’ll also feel the positive lift of the commodity pick up.”
· Investment funds buy $21.831 billion 10-year note in February - U.S. Treasury
· Iran reports highest number of new infections since December
· The average number of new infections reported in Czech Republic has been increasing for 12 days straight
· New infections reported by region
Of every 100 infections last reported around the world, more than 23 were reported from countries in Asia and the Middle East. The region is reporting a million new infections about every 16 days and has reported more than 24,655,000 since the pandemic began.
· Some Australian states ease curbs on dancing after weeks of no COVID cases
· Japan regions push to end state of emergency as virus infections fall
Regional authorities in Japan have urged that emergency pandemic measures be lifted before a scheduled date of March 7, as new COVID-19 cases trend lower, the economy minister said, adding that the government would consult experts before it agreed.
· South Korea hails arrival of virus vaccines as first step in 'return to normal'
South Korea shipped its first doses of a coronavirus vaccine on Wednesday, transferring AstraZeneca vaccines from a production facility in the country to a warehouse outside the capital of Seoul in preparation for this week’s inoculation drive.
Healthcare workers are scheduled to receive the first batch of AstraZeneca PLC’s vaccine from Friday, as South Korea looks to protect 10 million high-risk people by July, on its way to reaching herd immunity by November.
· Thailand receives its first coronavirus vaccines
Thailand received on Wednesday its first 200,000 doses of Sinovac Biotech’s CoronaVac, the country’s first batch of coronavirus vaccines, with inoculations set to begin in a few days.
· China says ready to enhance exchanges with U.S. on trade, economic front
China is ready to enhance exchanges with the United States on the trade and economic fronts, Wang Wentao, the country’s new commerce minister, said on Wednesday.
He looks forward to working with U.S. colleagues to focus on cooperation and manage differences, Wang told reporters in a news conference.
· Another Chinese city launches a digital currency test — this time it’s much larger at $6 million
The southwestern Chinese city of Chengdu announced Tuesday it will hand out roughly $6 million in the latest test of the central bank’s digital currency.
The scale of the trial is much larger than one in Beijing earlier this month, which aimed to distribute roughly $1.5 million to 50,000 applicants. Other cities like Shenzhen and Suzhou have held their own tests of the People’s Bank of China’s digital currency in the last few months.
· Japan's Aso says must keep issuing deficit-covering bonds until 2025
Japan’s current fiscal situation means the country will likely be forced to keep issuing deficit-covering bonds at least until 2025, Finance Minister Taro Aso said on Wednesday.
“It’s true Japan has been able to issue massive bonds stably at low cost. Markets are calm now, but there is no guarantee it will stay that way in the future,” Aso told parliament.
“Fiscal sustainability is very important for Japan” given its huge public debt, he added.
Japan Finance Minister Aso: First-quarter GDP will no doubt undershoot fourth-quarter
Japan’s economy will likely deteriorate this quarter compared with the previous three-month period, Finance Minister Taro Aso said on Wednesday, stressing the need to swiftly carry out planned stimulus measures.
Speaking to reporters after a cabinet meeting, Aso said the government was not currently considering adopting any fresh stimulus.
· Hong Kong announces over $15 billion budget to lift economy out of recession
· Chipmakers in drought-hit Taiwan order water trucks to prepare for 'the worst'
Taiwan chipmakers are buying water by the truckload for some of their foundries as the island widens restrictions on water supply amid a drought that could exacerbate a chip supply crunch for the global auto industry.
Some auto makers have already been forced to trim production, and Taiwan had received requests for help to bridge the shortage of auto chips from countries including the United States and Germany.
· Biden, Trudeau pledge to counter China, climate change, in warm first 'meeting'
U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau sought on Tuesday to turn the page on the Trump era, stressing the countries’ deep ties and pledging to work together to counteract Chinese influence and address climate change.
· Biden, Iraqi prime minister discuss recent rocket attacks: White House
U.S. President Joe Biden and Iraqi Prime Minister Mustafa Al-Kadhimi discussed recent rocket attacks on Iraqi and coalition forces in a phone call on Tuesday and agreed those responsible “must be held fully to account,” the White House said.
· Myanmar minister flies to Thailand for crisis talks
Myanmar’s military-appointed foreign minister flew into Thailand on Wednesday, a Thai government source said, as Myanmar’s neighbours intensified efforts to resolve a crisis that began when its army seized power in a Feb. 1 coup.
· Oil prices drop on surprise build in U.S. crude stocks
Oil prices fell on Wednesday after industry data showed a surprise build in U.S. crude stocks last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut.
Crude stockpiles rose by 1 million barrels in the week to Feb. 19, the American Petroleum Institute (API) reported on Tuesday, against estimates for a draw of 5.2 million barrels in a Reuters poll.
API data showed refinery crude runs fell by 2.2 million bpd.
U.S. West Texas Intermediate (WTI) crude futures were down 56 cents or 0.9% at $61.11 a barrel at 0506 GMT, after slipping 3 cents on Tuesday.
Brent crude futures fell 35 cents, or 0.5%, to $65.02 a barrel, erasing Tuesday’s 13 cents gain.
Reference: CNBC, Reuters
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