The dollar rose to a near two-week high against the Japanese yen on Thursday as optimism around easing trade tensions between the United States and China sapped demand for safe-haven currencies, even as the holiday-thinned trading limited large moves in the FX market.
Against the Japanese yen, which tends to benefit during geopolitical or financial stress as Japan is the world’s biggest creditor nation, the dollar rose 0.26% to 109.63 JPY=.
The offshore yuan was near flat on the day against the U.S. currency at 6.9911 yuan per dollar CNH=.
The dollar index .DXY, which measures the greenback against six other major currencies, was 0.13% lower at 97.523.
With global currency markets in holiday mood following Christmas Day on Wednesday and with several centers still closed on Thursday, overall trading activity was subdued.
“Overall, it is so quiet you can hear crickets. Most of the western world remains closed and liquidity is very thin,” Doyle said.
Sterling traded at $1.3004 GBP=, up a bit from levels before the Christmas holiday though still way below its Dec. 13 peak of $1.3514.
· The number of Americans filing applications for unemployment benefits fell last week in a sign of ongoing labor market strength.
Initial claims for state unemployment benefits decreased 13,000 to a seasonally adjusted 222,000 for the week ended Dec. 21, the Labor Department said on Thursday.
· U.S. shoppers spent more online during this year’s holiday shopping season, a report by Mastercard Inc (MA.N) showed on Wednesday, with e-commerce sales hitting a record high.
The holiday shopping season is a crucial period for retailers and can account for up to 40% of annual sales. But this year, Thanksgiving, which traditionally starts the U.S. holiday shopping period, was on Nov. 28, nearly a week later than last year’s Nov. 22, leaving retailers with six fewer days to drive sales between Thanksgiving and Christmas.
E-commerce sales this year made up 14.6% of total retail and rose 18.8% from the 2018 period, according to Mastercard’s data tracking retail sales from Nov. 1 through Christmas Eve.
Overall holiday retail sales, excluding autos, rose 3.4%.
· China’s fourth-quarter economic growth may have been “the weakest of 2019” — but it still showed an improvement compared to the previous quarter and to the same period a year ago, a business survey released on Thursday showed.
Manufacturing and services saw the strongest revenue improvement compared to the the previous quarter, though profit was “muted,” according to research firm China Beige Book’s quarterly review of the world’s second-largest economy, which was based on a survey of more than 3,300 Chinese businesses.
Three important results emerged from the survey.
First, there are signs that cash flows have deteriorated quickly. “It is easy to discount a seemingly unceasing trend of worsening cash flow, since it in some ways is a feature of the system. But even by Chinese standards, Q4 late payables and deliverables soared—to the worst levels we’ve recorded,” the report said.
Secondly, new orders continue to fall even though companies are reporting higher revenue in the fourth quarter. “Demand may not hold up,” the report said, adding that “firms may not yet have understood the message their customers are sending.”
Finally, the economy saw record levels of corporate borrowing in the fourth quarter, the survey showed. “Loan applications nationally shot to an all-time high, while rejections sank to an all-time low,” according to the China Beige Book. “For the first time since 2012 we saw each of our four core sectors—Manufacturing, Retail, Services, and Property—report over 30% of firms borrowing.”
· Public broadcaster NHK sent an erroneous report saying a missile from North Korea appeared to have fallen into the sea off Japan's Hokkaido early Friday but quickly corrected it, saying the message was posted on its website by accident.
Amid heightened tensions between North Korea and the U.S., Japan’s national broadcaster NHK issued an alert saying the Asian nation had launched a missile -- only to retract it in error minutes later.
· Oil prices were up about 1% to the highest in more than three months on Thursday, boosted by hopes that the China-U.S. trade fight would soon come to an end and by a report showing lower U.S. crude inventories.
Brent crude futures LCOc1 settled at $67.92 a barrel, rising 72 cents, or 1.07%. U.S. West Texas Intermediate crude futures CLc1 settled at $61.68 a barrel, up 57 cents, or 0.93%Both benchmarks were their strongest since Sept. 17.
China on Wednesday said it was in close touch with the United States on a trade deal signing ceremony, after U.S. President Donald Trump said a day earlier that he and Chinese President Xi Jinping will hold a ceremony to sign the Phase 1 trade deal.
Reference: Reuters, CNBC
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