• The dollar edged higher on Wednesday as investors awaited the outcome of the Federal Reserve’s policy meeting for clues about future tightening, while the beleaguered New Zealand dollar came roaring back to life on strong jobs data.
The dollar index, which tracks the greenback against a basket of six major rivals, added 0.1 percent to 94.680, though it remained shy of Friday’s three-month high of95.150.
Ahead of a trip to Asia, President Donald Trump is expected to announce his choice for new Fed chair on Thursday, with news reports tipping Fed Governor Jerome Powell as likely to be nominated to take over when current Fed Chair Janet Yellen’s term expires in February.
Ahead of U.S. employment data on Friday, other figures gave credence to the view that the economy is gaining momentum.
The New Zealand dollar stole the Asian spotlight, soaring 0.9 percent to $0.6906 after touching a one-week high of $0.6915, boosted by data showing the country’s jobless rate sank more than expected to a nine-year low of 4.6 percent.
The dollar added 0.2 percent to 113.85, though it remained shy of its three-month high of 114.45 yen on Friday.
Japanese markets will be closed for a national holiday on Friday, with many investors in Tokyo positioning ahead of that, market participants said, though most were wary of taking aggressive bets before the U.S. jobs data.
The euro edged down 0.1 percent to $1.1632, still nursing its losses after tumbling to a three-month low of $1.1574 on Friday, a day after the ECB said it will extend its bond purchases into September 2018.
• The Bank of England will issue a rate decision on Thursday, that many expect will bring its the first rate hike in more than a decade.
Most economists polled by Reuters expect the central bank to raise its official cost of borrowing to 0.5 percent after last year’s 25-basis-point cut in the aftermath of the vote for Brexit.
• The Federal Reserve is expected to keep interest rates unchanged on Wednesday as speculation swirls on who will be its next leader, but the U.S. central bank will likely point to a firming economy as it edges closer to a possible rate rise next month.
• CME announced Tuesday it plans to launch bitcoin futures in the fourth quarter, pending regulatory review.
Bitcoin rose to a record high above $6,400 Tuesday morning, according to CoinDesk, after the announcement by the world's largest futures exchange.
"Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract," Terry Duffy, CME Group chairman and CEO, said in a statement.
• U.S. President Donald Trump will not go to the heavily fortified demilitarized zone (DMZ) on the border of North Korea and South Korea during his Asia trip, a senior administration official said on Tuesday.
• The United States is quietly pursuing direct diplomacy with North Korea, a senior State Department official said on Tuesday, despite U.S. President Donald Trump’s public assertion that such talks are a waste of time.
• Britain is accelerating preparations for “all eventualities” when it leaves the European Union, but both sides are hopeful an agreement on stepping up talks to unravel more than 40 years of partnership will be sealed soon.
With only 17 months remaining until Britain’s expected departure, the slow pace of talks has increased the possibility of it leaving without a deal, alarming business leaders who say time is running out for them to make investment decisions.
British and EU negotiators met in Brussels on Tuesday and agreed to hold further divorce talks on Nov.9-10.
• The Caixin/Markit manufacturing Purchasing Managers' Index for October came in at 51.0. Economists polled by Reuters expected the private PMI reading to be at 51.0 for October — unchanged from September.
While the reading signaled a marginal improvement in manufacturing operating conditions across China, production increased at the weakest pace in fourth months, Caixin and Markit said in a joint press release. Coupled with growth in new orders, that means there was an increase in outstanding business, they added.
Output may still be pressured in the months ahead.
• Growth in China’s manufacturing output slowed in October, threatening to chill activity across Asia, as tough steps to reduce air pollution forced factories to reduce production and a crackdown on financial risk-taking weighed on smaller firms.
While business surveys on Wednesday suggested Asia’s export-driven expansion still has legs, the readings are starting to reflect signs of fatigue after an impressive sprint so far this year, suggesting regional economic growth has peaked.
Still, barring any unexpected shocks, most analysts polled by Reuters expect the global economy will remain on a roll for one more year, even if China sees a gradual loss of momentum.
• Japan’s Shinzo Abe was re-elected prime minister on Wednesday after his ruling bloc’s big election win last month and days ahead of a visit by U.S. President Donald Trump that is expected to be dominated by concerns over a volatile North Korea.
• Japanese manufacturing activity in October slowed less than initially thought, a revised private survey showed on Wednesday, in a sign that demand remains strong enough to support economic growth.
The final Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) was a seasonally adjusted 52.8, above the preliminary reading of 52.5 and just below September’s final reading of 52.9.
• South Korea will never tolerate North Korea as a nuclear state, nor will Seoul have nuclear weapons, President Moon Jae-in said on Wednesday, as China pledged to work on denuclearization after setting aside a dispute with Seoul over an anti-missile system.
Soaring memory chip sales helped South Korea exports record 12 consecutive months of growth in October, evidence Asia’s fourth largest economy is stepping up a gear.
Exports grew 7.1 percent on-year, far below bumper growth of 35 percent in September, but average exports per working day came in at $2.5 billion, outperforming September’s $2.35 billion, government data showed on Wednesday.
• Brent crude oil prices were near two-year highs on Wednesday as OPEC has significantly improved compliance with its pledged supply cuts and Russia is also seen keeping to the deal.
Brent futures, the international benchmark for oil prices, were at $61.15 per barrel at 0504 GMT, up 21 cents, or 0.34 percent, since their last close and near the$61.41 a barrel two-year high from intraday trading on Tuesday. Brent is up almost 38 percent since its 2017-lows last June.
U.S. West Texas Intermediate (WTI) crude was at $54.65 a barrel, up 27 cents, or 0.5 percent, and close to February highs. It is up almost 30 percent since 2017-lows in June.
Reference: Reuters, CNBC
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