Dollar turns lower against major rivals on fresh U.S. election jitters
The U.S. dollar hovered near multi-week lows against a basket of major currencies on Thursday, ending a morning reprieve which saw the dollar stabilize, on uncertainty surrounding the outcome of the U.S. presidential election.
The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.24 percent at 97.163, not far from a more than three-week low of 97.041 also touched Thursday. The index was mostly flat to slightly higher earlier, reaching a session high of 97.456.
Analysts attributed the dollar's earlier stability to a New York Times/CBS poll of 1,333 registered voters that found U.S. Democratic candidate Hillary Clinton ahead by 3 percentage points. In addition, a Washington Post/ABC poll showed Clinton 2 percentage points ahead among 1,767 likely voters surveyed Oct. 29-Nov. 1.
Analysts said, however, that traders continued to prepare for the risk of a victory from Republican candidate Donald Trump. Clinton has been viewed as the candidate of the status quo, while many fear that a victory for Trump would carry global risks to trade and growth.
"We're now seeing markets price in a higher risk of a Trump presidency," Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "Most polls are still showing that it's far too close to call, and that's ultimately what is keeping investors nervous."
WRAPUP 2-U.S. services sector slows; jobless claims rise
U.S. services industry activity cooled in October amid a slowdown in new orders and hiring, suggesting a moderation in economic growth early in the fourth quarter.
Other data on Thursday showed planned job cuts by U.S.-based employers dropped 31 percent to a five-month low last month. That underscored the labor market's healthy fundamentals, though more Americans filed for unemployment benefits last week.
The mixed reports came a day after the Federal Reserve offered a fairly upbeat assessment of the economy and signaled it could raise interest rates next month.
The Institute for Supply Management (ISM) said its non-manufacturing index fell 2.3 percentage points to a reading of 54.8 percent in October. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of the U.S. economy.
Services industries reported a moderation in new orders and employment, as well as demand for exports.
The new orders sub-index dropped 2.3 percentage points to 57.7, while a measure of services sector employment decreased 4.1 percentage points to 53.1. A sub-index for export orders fell 1.0 percentage point last month.
Separately, the Labor Department said on Thursday that initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 265,000 for the week ended Oct. 29, the highest level since early August.
It was still the 87th straight week that claims remained below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller.
U.K. Court Puts Brexit in Hands of Parliament
LONDON—A U.K. court put a hurdle in the country’s route out of the European Union, ruling that Prime Minister Theresa May can’t start the process without approval from Parliament.
The High Court decision offers a potential opening to lawmakers to disrupt her plans and steer the country toward a “soft” exit that maintains stronger ties to the bloc and a more-open immigration policy.
The government said it would appeal the verdict to the Supreme Court, which would hear the case in early December, under a predetermined timetable. If the ruling is upheld, lawmakers would have a chance to pressure Mrs. May to soften her terms in breakup negotiations with the EU. They could delay the process or even halt it.
The ruling on Thursday lifted the pound; the currency later extended its gains after the BOE announcement. The U.K’s benchmark FTSE 100 fell 0.23% on Thursday. The U.K.’s major listed companies earn most of their revenue outside the country, so a rise in the pound can be negative for the index.
Oil ends down on U.S. inventory surge, doubts on OPEC resolve
Oil prices settled down more than 1 percent on Thursday as investors reeled from a record weekly surge in U.S. crude inventories, and remained skeptical about whether OPEC can actually implement its planned output cap.
U.S. crude fell 68 cents, or 1.5 percent, to settle at $44.66 per barrel. At one point, oil had fallen more than $1 a barrel and hit a session low of $44.37.
Reference: Reuters, CNBC, Bloomberg
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