· The dollar was stalled on Thursday a day ahead of the release of U.S. gross domestic product data, little moved by weak factory activity data or President Donald Trump’s impeachment.
The dollar index .DXY was down 0.03% to 97.375 as traders held off from making major moves before the Commerce Department on Friday reports the final estimate of third-quarter GDP. Against the euro EUR=, the dollar was down 0.11% to $1.112.
The dollar was also mostly unmoved by Treasury Secretary Steven Mnuchin’s statement on Thursday that the United States and China would sign their Phase One trade pact at the beginning of January. Mnuchin said the pact was completely finished and just undergoing a technical “scrub.”
Elsewhere, the Bank of England kept interest rates steady, saying it was too soon to gauge how much Prime Minister Boris Johnson's electoral victory would lift the Brexit uncertainty that has hung over the economy. The pound was 0.51% weaker against the dollar at $1.301 GBP=, extending its precipitous drop this week after Johnson rekindled the possibility of a British exit from the European Union without a trade agreement.
The pound has fallen 3.72% since Johnson’s win on Dec. 13.
· Less than half of all Americans say President Donald Trump should be removed from office following his impeachment by the U.S. House of Representatives, according to a Reuters/Ipsos opinion poll released on Thursday, presenting a challenge for Democrats who will seek his ouster in a U.S. Senate trial.
· U.S. companies’ borrowings for capital investments fell about 3% in November from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Thursday.
The companies signed up for $7.8 billion in new loans, leases and lines of credit last month, down from $8 billion a year earlier. Borrowings fell 23% from the previous month.
“Uncertainty brought on by the prolonged trade frictions with China...was partly responsible for this slowdown,” ELFA Chief Executive Officer Ralph Petta said, adding that credit markets were performing well, with losses and delinquencies in acceptable ranges.
· The House passed a new North American trade deal on Thursday, ending a more than year long slog to iron out Democratic concerns about the agreement.
The chamber approved the United States-Mexico-Canada Agreement, one of President Donald Trump’s economic and political priorities, in an overwhelming 385-41 vote. Thirty-eight Democrats opposed it. The trade pact now heads to the Senate, which is expected to ratify it next year.
· The British parliament will vote on Boris Johnson’s Brexit deal on Friday, a move the prime minister described as delivering on his promise to “get the Brexit vote wrapped up for Christmas” following his landslide election victory.
· German exports are likely to remain subdued in the coming months as slowing world trade and global risks continue to hurt manufacturers, the Finance Ministry said in its monthly report on Friday.
The German economy has been going through a soft patch. Its export-oriented manufacturers are struggling with trade disputes, its car industry is adapting to a costly shift to electric vehicles, and Britain’s planned departure from the European Union is creating uncertainty for businesses.
The Finance Ministry added that Germany’s robust labor market should continue to support the domestic economy.
· Oil prices reached the highest level in three months in thin pre-Christmas trading on Thursday, buoyed by the previous day’s news that U.S. crude inventories declined and as U.S.-China trade tensions continued to ease.
Brent crude futures rose 37 cents to settle at $66.54 a barrel, gaining for the sixth straight day.
U.S. West Texas Intermediate (WTI) crude rose 29 cents to settle at $61.22 a barrel.
Trading volume was thin, with oil headed for a third consecutive weekly rise. Prices were buoyed by China’s Dec. 13 decision to cancel a plan to impose additional tariffs on U.S. imports on Dec. 15 and the Phase 1 deal between Washington and China, which has eased trade tensions.
The deal between the world’s two largest economies has improved the global economic outlook, lifting prospects for higher energy demand next year and underpinning oil prices.
“The market’s happy with (Dec. 15) tariffs out of the way and the trade truce, for now,” said Bill Baruch, president at Blue Line Futures in Chicago.
In a further sign of thawing relations, China’s finance ministry on Thursday published a new list of six U.S. products that will be exempt from tariffs starting on Dec. 26.
However, if U.S. and Chinese officials fail to provide concrete details about their efforts to reach a trade agreement, oil prices could lose their upward momentum, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
“Unless we get real granularity, the uncertainty around what’s happening on the trade front will start to add more resistance. We need to see signs that a real resolution is at hand,” McGillian said.
Reference: CNBC, Reuters
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