• The dollar wallowed near six-month lows against a basket of major currencies on Thursday as the U.S. political crisis appeared to deepen, and likely to delay any efforts by President Donald Trump to carry out his economic stimulus plans. The dollar index reached its lowest level since early November, having shed 2.2 percent in the past four sessions. It last stood at 97.42, having given up all the gains it had made following the U.S. election in November.
The euro EUR= hit a six-month high of $1.1174 and last stood at $1.1161.
Against that backdrop, the dollar dropped 2.09 percent against the yen on Wednesday, its biggest fall since July 29 last year. It fell to a three-week low of 110.53 yen on Thursday before bouncing back a tad to 111.09 yen JPY=, up 0.3 percent from late U.S. levels, on Japanese bargain-hunting.
• Investors were shelving rosy hopes for U.S. tax reform and rethinking strategies premised on Donald Trump's economic growth promises on Wednesday, as the President faced his loudest criticism yet over possible collusion between his election campaign and Russia.
• Scandals enveloping U.S. President Donald Trump have left Republican lawmakers and lobbyists increasingly gloomy about the prospects for passing sweeping tax cuts, a rollback of Obamacare and an ambitious infrastructure program.
• The White House is set to unveil President Donald Trump's first full budget for the 2018 fiscal year on Tuesday - a plan that will include details about his proposed cuts to foreign aid and domestic spending, and his desired hikes for the military.
Trump will not be in town for the occasion. He embarks on his first foreign trip on Friday to the Middle East and Europe.
The White House had released what is known as a "skinny budget" in March, Trump's first crack at a summary of his spending wishes for discretionary programs for the year that begins Sept. 30.
• U.S. industry groups have told President Donald Trump's administration that they want two main things from his promised regulatory overhaul: a speedier permit process and simpler environmental rules.
• U.S. and EU officials will meet next week in Washington for more talks about risks to air travel after a meeting in Brussels on Wednesday did not, as some industry watchers had expected, extend a cabin ban on large electronics devices.
• Minneapolis Federal Reserve Bank President Neel Kashkari on Wednesday warned against using interest-rate hikes to address unwanted asset bubbles, saying that bubbles are hard to identify and such hikes would likely do more harm than good.
• U.S. political turmoil and softer-than-expected U.S. economic data in the past week, such as retail sales, consumer inflation and housing starts, is leading market players to discount the chance of more rate hikes.
Fed Fund futures are now pricing in only about 60 percent chance of a rate hike by June, compared to around 90 percent earlier this month, and are no longer pricing in a 100 percent of one hike even by December.
• Japan's economy expanded at the fastest pace in a year in the first quarter, government data showed on Thursday, heightening prospects of a steady recovery driven by robust global demand.
• Oil prices settled at a two-week high on Wednesday after U.S crude inventories declined for the sixth straight week, a positive sign for markets ahead of next week's OPEC meeting, where major oil producers are expected to extend supply cuts.
Brent crude settled 56 cents firmer at $52.21, a 1.1 percent gain, while U.S. light crude closed 41 cents higher at $49.07, its highest close since April 28.
• The U.S. Energy Information Administration said U.S. crude inventories fell 1.8 million barrels for the week to May 12, less than the of 2.4 million barrels that had been forecast. Gasoline and distillate stocks also dropped.
• The Organization of Oil Exporting Countries (OPEC) and other key producers will gather in Vienna on May 25 to decide whether to extend output cuts of 1.8 million bpd that started in the first half of 2017. Riyadh and Moscow say they should be extended until March 2018.
Reference: Reuters
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