· The yen stood tall on Tuesday as tensions on the Korean peninsula flared-up anew amid an escalating war of words between North Korea and the United States, while the euro struggled near a four-week low versus the dollar.
The dollar was steady at 111.760 yen JPY= after coming off a high of 112.530 the previous day.
The euro was 0.1 percent higher at $1.1856 EUR= but in close reach of $1.1832, its lowest level since Aug. 31plumbed the previous day when it sank nearly 1 percent.
The dollar index against a basket of six major currencies was a shade lower at 92.610 .DXY after rising 0.5 percent the previous day to a three-week high of 92.724.
· North Korea’s foreign minister said on Monday President Donald Trump had declared war on North Korea and that Pyongyang reserved the right to take countermeasures, including shooting down U.S. bombers even if they are not in its air space.
Ri Yong Ho said a Twitter message by Trump on Saturday, in which the president warned that the minister and North Korean leader Kim Jong Un “won’t be around much longer” if they acted on their threats, amounted to a declaration of war.
White House spokeswoman Sarah Sanders on Monday denied the United States had declared war, calling the suggestion “absurd”.
· The U.S. House of Representatives on Monday failed to approve a bill to allow the Federal Aviation Administration to continue to operate and a package of tax relief bills to aid hurricane victims after ranking Democrats objected.
· U.S. Senator Susan Collins rebuffed intense lobbying from fellow Republicans and the promise of more money for her state in deciding on Monday to oppose - and likely doom - her party’s last-ditch effort to repeal Obamacare.
· A report from Standard & Poor’s Global Ratings on Monday suggested that the latest proposed healthcare bill to overhaul Obamacare could hurt the U.S. economy, states and health insurers.
The Graham-Cassidy-Heller-Johnson (GCHJ) bill, if implemented, could led to $240 billion in lost economic activity by 2027 and impact 580,000 jobs, the report indicated.
· The Federal Reserve should wait until there are clear signs that American paychecks and prices are rising before raising interest rates again, a U.S. central banker said Monday, warning that moving too fast would be a policy “misstep.”
Chicago Federal Reserve Bank President Charles Evans, who votes this year on monetary policy, said he broadly agrees with his colleagues who believe rates should rise gradually to about 2.7 percent over the next two years or so, from the current range of between 1 percent and 1.25 percent.
But he said inflation, running at 1.4 percent by the Fed’s preferred gauge, is too low, and voiced concerns that low inflation expectations will keep it from rising toward the Fed’s 2-percent inflation goal.
· The Federal Reserve is on track to gradually raise interest rates given the recent inflation weakness is fading and the U.S. economy’s fundamentals are sound, an influential Fed policymaker said on Monday, reinforcing the central bank’s confident tone.
New York Fed President William Dudley, among the first U.S. central bankers to speak publicly since a decision last week to hold rates steady for now, cited the soft dollar and strong overseas growth among the reasons he expects slightly above-average U.S. economic activity and a long-sought rise in wages.
· Minneapolis Fed President Neel Kashkari said on Monday that he sees no need for the U.S. Federal Reserve to raise interest rates further as he sees no evidence recent weak inflation data is set to improve.
· The European Central Bank is growing increasingly confident that inflation will rise back to its target, but patience is still needed, not least to make sure the economic recovery lasts, ECB President Mario Draghi said on Monday.
· Japanese Prime Minister Shinzo Abe has called an election a year early and will dissolve parliament on Thursday.
Mr Abe said he was seeking a fresh mandate to overcome "a national crisis" amid rising threats from North Korea.
He also said he would continue on his path of fiscal reform and would use the revenue from the recently introduced sales tax to balance the budget and reduce debt.
Mr Abe did not set a date for the vote but Japanese media suggest it will be on 22 October.
· Analysts see the early vote as his way to seize the resurgent support and exploit the current weakness of the opposition. In July, his ratings had dropped to less than 30% but then recovered to above 50% in September.
· Oil prices soared more than 3 percent on Monday, with Brent hitting its highest in more than two years, after major producers said the global market was on its way to rebalancing, while Turkey threatened to cut oil flows from Iraq’s Kurdistan region toward its ports.
The November Brent crude futures contract settled up$2.16, or 3.8 percent, at $59.02 a barrel, its highest since July, 2015.
U.S. West Texas Intermediate crude for November delivery rose $1.56, or 3 percent, to settle at $52.22 a barrel, the highest since April.
Reference: Reuters, BBC
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