· Dollar holds ground, more losses seen as U.S. election drags on
The dollar steadied against many currencies on Friday but traders say more losses are likely as a contentious U.S. presidential election diminished hopes for large stimulus to support the economy any time soon.
Investors are betting that Democrat Joe Biden will become the next president but Republicans will retain control of the Senate, which will make it difficult for the Democrats to pass the larger fiscal spending package they have been pushing.
Biden maintains an edge over President Donald Trump, but a few important states are still counting votes and Trump is mounting legal challenges to vote counts, so there is still a high degree of uncertainty.
The dollar index against a basket of six major currencies stood at 92.641, close to a two-week low.
For the week, the dollar index was down 1.5%, on course for its biggest drop in almost four months.
A large decline in long-term Treasury yields due to expectations for less fiscal spending, combined with a rally in equities and other riskier assets, has placed the dollar under consistent selling pressure that is likely to continue.
Against the euro, the dollar traded at $1.1819 after falling 0.87% in the previous session.
The British pound traded at $1.3127, holding onto a hefty 1.23% gain from Thursday.
Voting tallies from several U.S. states continued to trickle in during the Asian session, but currencies showed little reaction because the declaration of an outright winner could take several more days or even weeks, some traders said.
Worries about the U.S. economy are growing, which is a reason to expect declines in the dollar to continue into next year, some analysts say. The rise in new coronavirus cases to record levels in several states could also curb economic activity.
The onshore yuan fell slightly to 6.6307 per dollar but still remained close to its more than two-year high reached on Thursday.
· Trump takes fighting stance as election swings toward Biden
As former Vice President Joe Biden moved closer to winning the White House, President Donald Trump adopted a fighting posture on Thursday, making false claims to undermine a vote that was not going his way.
While Biden, a Democrat, called for calm and patience, Republican Trump, without offering evidence, said his opponents were engaging in fraud and election theft, accusations he has been making long before Election Day.
“If you count the legal votes I easily win,” Trump said during remarks the White House, his first public appearance since Wednesday morning. “This is a case where they’re trying to steal an election. They’re trying to rig an election, and we can’t let that happen.”
Trump suggested he had won states that have been called in favor of Biden and sharply criticized polling before the election that he said was designed to suppress the vote because it favored the Democrat.
· U.S. Postal Service says 1,700 ballots found in Pennsylvania facilities
The U.S. Postal Service (USPS) said about 1,700 ballots had been identified in Pennsylvania at processing facilities during two sweeps Thursday and were in the process of being delivered to election officials.
· EU Commissioner Breton sees 50/50 chance of Brexit deal
· China's central bank says it won't be hasty with policy changes
China’s central bank will consider policy changes as the economy recovers, but it will not make hasty moves and any shifts would be based on accurate economic assessments, a vice governor of the People’s Bank of China (PBOC) said on Friday.
Liu Guoqiang said China’s economic recovery is on a solid footing due to the country’s effective virus control and policy measures to support growth.
· China's exports seen maintaining momentum; import growth cools: Reuters poll
China’s foreign trade is expected to have grown quite strongly in October due to a recovery in global markets and the domestic economy, a Reuters poll showed, but there are fears that the coronavirus upsurge overseas could slow trade in coming months.
In October, exports are expected to have risen 9.3% from a year earlier, according to a median estimate of a Reuters poll of 20 economists, down slightly from the 9.9% gain in September.
Imports likely rose 9.5% on year, which economists regarded as a solid increase though it would be slower than in September, when imports rebounded 13.2%.
China’s trade surplus is expected to have widened to $46 billion in October from $37 billion in September, according to the poll.
· Japan's economy seen rebounding in third quarter, but coronavirus crisis weighs: Reuters poll
Japan’s economy likely rebounded in the third quarter as global demand picked up, a Reuters poll showed, but the effects of the coronavirus crisis persisted and it could take some time to return to pre-pandemic levels.
Gross domestic product (GDP) is forecast to have grown an annualised 18.9% in July-September, the poll of 18 economists showed, the fastest pace of growth on record since comparable data became available in 1980.
On a quarter-on-quarter basis, GDP is expected to have expanded 4.4% in the third quarter after it contracted 7.9% in the previous three months, the poll showed.
A return to growth would pull the world’s third-largest economy out of its worst postwar recession, but analysts say a rapid recovery like that seen in China is unlikely.
· Japan's household spending, wages slump as COVID-19 pain lingers
Japan’s household spending slumped in September from a year earlier and real wages slid for the seventh straight month, data showed on Friday, a sign sluggish domestic demand will continue to drag on any recovery in the world’s third-largest economy.
The data underscores the challenge authorities face in balancing the need to prevent the spread of the coronavirus pandemic and reviving economic activity.
Household spending fell 10.2% in September from a year earlier, marking the fourth biggest drop on record and roughly matching a median market forecast for a 10.7% fall, government data showed. It followed a 6.9% drop in August.
· Australia says industry reports on China trade "deeply troubling"
Australia says it is closely monitoring trade flows to China amid “deeply troubling” reports from industry that Chinese buyers have been told not to purchase seven categories of Australian products and commodities from Friday.
· Australia’s central bank says recovery underway, population slowdown a major drag
Australia’s central bank on Friday nudged up its forecasts for near-term economic activity but warned that a drastic downturn in population growth meant the economy would be “noticeably smaller” than assumed pre-pandemic.
· Malaysia unveils expansionary budget to boost pandemic recovery: government reports
· Oil slumps as Covid-19 infections surge, U.S. vote-count drags on
U.S. oil fell more than 2% on Friday as new lockdowns in Europe to halt surging infections of Covid-19 sparked concern about the outlook for demand, while markets remained on edge over drawn-out vote counting in the U.S. election.
West Texas Intermediate was down $1.06, or 2.7%, at $37.73 a barrel at 0538 GMT, after dropping 0.9% on Thursday. Brent crude was off $1.05, or 2.6%, at $39.88, having fallen 0.7% in the previous session.
Italy recorded its highest daily number of infections on Thursday and cases surged by at least 120,276 in the United States, the second consecutive daily record as the outbreak spreads across the country.
Reference: Reuters, CNBC
Thai
Eng