· The dollar was lodged near a three-year low against a basket of currencies on Friday as fears of a possible U.S. government shutdown added to underlying weakness that stems from the growing trend toward monetary policy normalisation around the world.
The dollar index stood at 90.378, having fallen to as low as 90.104 this week, a level last seen in December 2014. It has already lost roughly 2 percent so far in 2018.
The euro edged up 0.2 percent to $1.2261, near the three year high of $1.2323 struck on Wednesday. Having advanced 0.5 percent so far this week, the common currency could post a fifth consecutive week of gains.
The dollar eased 0.2 percent to 110.86 yen, with its rebound from Wednesday’s four-month low of 110.19 already fading despite rise in U.S. debt yields.
· The House passed a spending bill Thursday to avoid a U.S. government shutdown, but Senate Democrats say they have the votes to block the measure in a bid to force Republicans and President Donald Trump to include protection for young immigrants.
The 230-197 vote came just over a day before current funding is set to run out at midnight Friday. The bill would keep the government open through Feb. 16 while all sides negotiate on longer-term funding for defense and domestic programs.
The Senate took an initial vote to advance the bill late Thursday, but was headed toward an additional procedural step requiring 60 votes, which Democrats say they will be able to block.
Whether the Senate can pass such a measure ahead of a Friday midnight deadline is a different issue altogether. Because the measure will need 60 votes to pass the chamber to break a filibuster, Republican leaders need as many as more than a dozen Democrats.
· The bond market is in the process of making an important move, and stock traders are keeping a wary eye on it.
On Thursday afternoon, the benchmark 10-year Treasury yield crept close to 2.63 percent, a level it came near last year but has not really traded above since 2014. The yield was above 2.62 percent in afternoon trading Thursday.
"The pain point comes at 2.63 percent, where everybody believes that's the breakout, and everyone will be keying on that," said Art Hogan, chief market strategist at B. Riley FBR. "This is a more-than-three-year range that we're attempting to break out of here."
He added that technically it appears there could then be a quick move higher to 2.75 percent.
While 2.63 percent and even 2.75 percent are not historically high yields, the move out of a lower long-term range reminds stock investors that bond yields can lure money away from the stock market if they get high enough. They also could mean higher borrowing costs for U.S. companies. The 10-year itself is key, because it influences so many business and consumer loans, including mortgages.
· North Korea may be preparing to hold a military parade on the eve of next month’s winter Olympics in South Korea, analysts and diplomats say, even as the two countries have sought to mend ties.
Recent commercial satellite imagery shows formations of North Korean troops marching at a parade training ground, said Scott LaFoy, an analyst with the website NK Pro, which monitors North Korea.
· Oil prices dropped more than 1 percent on Friday as a bounce-back in U.S. production outweighed ongoing declines in crude inventories.
Brent crude futures LCOc1 were at $68.65 a barrel at 0802 GMT, down 66 cents, or 0.95 percent, from their last close. On Monday, they hit their highest since December 2014 at $70.37.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.23 a barrel, down 72 cents, or 1.1 percent, from their last settlement. WTI marked a December-2014 peak of $64.89 a barrel on Tuesday.
Reference: Reuters, CNBC
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