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· Dollar sags as investors brace for dovish Fed signals

The dollar wallowed near its lowest level for the week on Thursday as investors looked for hints from Federal Reserve Chairman Jerome Powell that the central bank might tweak its policy framework to help push up inflation.

Powell is scheduled to address the Fed’s annual central bankers’ conference later in the day, usually held in Jackson Hole, Wyoming, but being conducted virtually this year because of the COVID-19 pandemic.

Investors are betting the U.S. central bank will introduce a new policy framework to fight persistently low inflation as early as next month.

“If the Fed turns out to be less dovish than many have been thinking, we could see a rally in the dollar,” said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

The dollar’s index against six major currencies =USD stood at 92.893, near the weakest level so far this week, and not far off its two-year low of 92.124 touched last week.

Since the start of the pandemic, the Federal Reserve has expanded its balance sheet by as much as about $3 trillion, far more than the European Central Bank and the Bank of Japan.

The euro changed hands at $1.1833 EUR=, near its highest level so far this week, though few market players expect a clear break from its range so far this week ahead of Powell's speech.

The dollar slipped to 105.97 JPY=, losing steam after hitting a one-week high of 106.58 on Tuesday.

Another key focus for the yen is Prime Minister Shinzo Abe’s news conference scheduled for Friday amid rising speculation over his health.

The yen is likely to gain should Abe decide to resign, given perception that aggressive monetary easing with close co-operation between the government and the central bank, dubbed Abenomics, has been one of his trademark policies, traders said.

The British pound stood firm at $1.3211 GBP=D4, having gained 0.9% since the start of week, while the Australian dollar AUD=D4 was changing hands at $0.7238 AUD=D4 up 1.1% so far this week.

The Chinese yuan was at its strong levels since January after data showed a recovery in profits at China’s industrial firms.

The offshore yuan stood at 6.8783 per dollar CNH=, near its highest level since Jan. 21.

· Treasury yields flat ahead of Powell’s Jackson Hole speech

U.S. government debt prices were hovering around the flatline Thursday, as traders await a speech by Federal Reserve Chairman Jerome Powell.

At around 2 a.m. ET, the yield on the benchmark 10-year Treasury note fell slightly to 0.6851%, whereas the yield on the 30-year Treasury bond slipped to 1.4051%. Yields move inversely to prices.

· Powell expected to begin laying out Fed's new monetary policy approach

Federal Reserve Chair Jerome Powell is expected on Thursday to begin setting out the U.S. central bank’s new strategy for meeting its price stability and maximum employment goals, a long-anticipated overhaul that comes amid a deep economic crisis and just months before Americans vote in a contentious election.

Powell is expected to discuss the results of the Fed’s framework review, an initiative started nearly two years ago through public hearings and research to explore how monetary policy should be adapted for a low interest rate environment. He is scheduled to begin his speech at 9:10 a.m. EDT (1310 GMT).

Through the framework review, the Fed could potentially clarify that it is okay with lower unemployment rates as long as inflation remains “under control” said David Wilcox, former head of the Fed’s research division and now a senior fellow at the Washington-based Peterson Institute for International Economics.

· Investors price for Fed chair to signal inflation can run higher

Investors are awaiting a pivotal speech by U.S. Federal Reserve chair Jerome Powell on Thursday, positioning for rates to be kept lower-for-longer and inflation to potentially run higher.

Powell will speak in online remarks to the Kansas City Fed’s annual economic symposium about the central bank’s framework review, an initiative to explore how monetary policy should adapt to changes in the economy.

Low inflation and interest rates have made the Fed’s conventional tools less powerful than before, and policymakers have been weighing whether to try to offset long periods of weak inflation with periods of higher inflation.

Mark Haefele, Chief Investment Officer Global Wealth Management, UBS, wrote that the Fed keeping rates “lower for longer” meant cash and the safest bonds were likely to deliver negative real returns for the foreseeable future.

· Trump ban on WeChat would hit U.S. business revenues, survey says

President Donald Trump’s executive order on messaging app WeChat would hit revenue for companies in China subject to U.S. jurisdiction, according to a survey released Wednesday by the American Chamber of Commerce in Shanghai.

On Aug. 6, the White House said that in 45 days, it would ban unspecified U.S. transactions with WeChat and its parent company Tencent due primarily to data security concerns. Chinese technology giant Tencent said in its quarterly earnings release last week that WeChat has more than 1.2 billion users worldwide.

· TikTok CEO Kevin Mayer to leave the company

TikTok CEO Kevin Mayer has quit the company just months after his appointment.

“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for. Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company,” Mayer said in a letter to employees obtained by CNBC.

Microsoft’s TikTok deal reportedly ballooned after Trump intervened

Microsoft’s acquisition talks with TikTok and its Chinese parent company ByteDance “ballooned” this summer after President Donald Trump intervened, according to a report from The New York Times, citing people familiar with the situation.

ByteDance is being forced to sell TikTok’s U.S. business by the Trump administration, which says the app’s current ties to China make it a national security threat. An executive order signed by Trump on Aug. 6 means a sale must go through before Sept. 15.However, TikTok sued the U.S. government on Monday, alleging it was deprived of due process. The lawsuit could delay the ban, giving TikTok more time to get a better deal for the sale.

· Hurricane Laura makes landfall in southwestern Louisiana near Texas

Hurricane Laura made landfall in southwestern Louisiana as a ferocious Category 4 monster with 150 mph winds early Thursday.

· Alibaba puts India investment plan on hold amid China tensions

China’s Alibaba Group has put on hold plans to invest in Indian companies, two sources aware of the plans told Reuters, amid souring business relations and rising political tension between the two nations after a clash on their Himalayan border.

Alibaba, which has fueled the growth of several Indian start-ups, will not put in fresh funds to expand its investments in the country for at least six months, the sources said.

However, there are no plans to reduce its stakes or exit investments, they added. The sources declined to be identified as the talks are private.

Alibaba did not respond to a request for comment.

The Chinese conglomerate and its affiliates Alibaba Capital Partners and Ant Group have invested more than $2 billion in Indian companies since 2015 and participated in funding rounds of at least another $1.8 billion, according to data from PitchBook, which tracks private market financing.

· China's industrial profits grow at fastest pace since mid-2018

Profits at China’s industrial firms grew for a third straight month and at the fastest pace since June 2018, marking a bright spot in the economy as the manufacturing sector slowly recovers from its coronavirus slump.

Profits at China’s industrial firms grew 19.6% on-year to 589.5 billion yuan ($85.58 billion), the statistics bureau said on Thursday, following an 11.5% increase seen in June, the National Bureau of Statistics (NBS) data showed on Thursday.

China’s recovery had been gaining momentum after the pandemic paralysed huge swathes of the economy as pent-up demand, government stimulus and surprisingly resilient exports revived activity.

However, some signs of weakness have emerged in July, with industrial output growing slower than expected. Some analysts said flood and torrential rain have dampened activity and demand for electricity.

Factories’ profits also face risks from increasingly tense U.S.-China relationship ahead of the U.S. presidential elections in November, which could impact overseas orders and confidence from investors and consumers.

· China makes proposal to U.S. in concession to solve accounting dispute: Bloomberg

China is proposing to let U.S. regulators audit its state-owned enterprises (SOEs) in a concession aimed at solving their long-running accounting dispute, but would insist on redacting some information on national security grounds, Bloomberg News reported on Thursday.

The United States has long complained of lack of access to audit working papers for U.S.-listed Chinese companies. Washington earlier this months threatened measures to delist Chinese firms that fail to meet its auditing requirements.

· BOJ's Suzuki says ready to ease more, may mull new means

Bank of Japan board member Hitoshi Suzuki said on Thursday the central bank would ease monetary policy further “without hesitation” if needed, with an eye on the impact the coronavirus pandemic could have on the economy.

If the central bank were to ramp up stimulus again, it could pump more liquidity through its lending facility, cut its short- and long-term interest rate targets, or ramp up buying of risky assets, he told a news conference.

· Pandemic may push Japan banks' credit costs to crisis levels: BOJ's Suzuki

Japanese financial institutions may see credit costs balloon to levels hit during the global financial crisis if a resurgence in coronavirus infections hammer the economy, Bank of Japan (BOJ) board member Hitoshi Suzuki said.

· Japan raises view on exports, but says economic situation still severe

Japan’s government upgraded its view on exports and output in August for the second straight month as global demand slowly improves, but authorities cautioned conditions were still severe due to the coronavirus pandemic.

The government left unchanged its overall assessment that the world’s third-largest economy is “showing signs of picking up” after falling into a deep recession due to the health crisis.

· South Korea reports 441 new cases — the most since March

South Korea reported 441 new coronavirus cases — the highest since March as the country’s health ministry flagged new clusters at call centers and logistics warehouses.

While authorities say the recent surge in cases is due to outbreaks in a church and at an anti-government rally this month, they also warned about the possibility of new clusters in densely packed workplaces.

At least 80% of the infections in the past week are from the densely populated Seoul metropolitan area, Reuters reported citing Health Minister Park Neung-hoo.

· South Korea central bank cuts 2020 GDP outlook, open to more stimulus to fight virus fallout

South Korea’s central bank kept interest rates steady on Thursday, but sharply downgraded its 2020 growth outlook and kept the door open for more monetary stimulus to support an economy hard hit by the coronavirus pandemic.

The Bank of Korea kept the seven-day repurchase rate at a record low of 0.5% KROCRT=ECI, in an unanimous and widely expected decision, after 75 basis points of rate cuts this year.

It said gross domestic product would likely shrink 1.3% in 2020 - the biggest contraction in more than two decades - from a previous forecast for a 0.2% decline.

Governor Lee Ju-yeol said monetary policy needed to be “actively” used if the downturn worsened, reiterating the central bank was open to more rate cuts and was willing to expand the use of other monetary tools.

· India reports record daily jump of 75,760 coronavirus infections

India reported on Thursday a record daily jump of 75,760 coronavirus infections, taking its total caseload to 3.31 million as cases surged across the country, data from the federal health ministry showed.

India is the worst affected country in Asia and third behind the United States and Brazil in terms of total cases. It has posted the highest single-day caseloads in the world since August 7, according to a Reuters tally.

Deaths in the same 24-hour period increased by 1,023, taking the death toll to 60,472.

· Australia COVID-19 hotspot reports lowest rise in cases in nearly two months

Australia’s Victoria state - epicentre of the nation’s second wave of COVID-19 infections - reported its lowest one-day rise in new cases in nearly two months, buoying hopes a lockdown of nearly 5 million people has contained spread of the virus.

Victoria said it detected 113 new cases in the past 24 hours, the lowest one-day rise since July 5. The state reported 149 infections on Wednesday

· Australia second-quarter business investment slide not as bad as feared, plus for GDP

Australian business investment fell by less-than-feared last quarter and future spending plans remained surprisingly intact in a hopeful sign the economic recession may not be as deep as forecast earlier.

During the June quarter, investment declined 5.9% to A$26.1 billion ($18.9 billion) on top of a downwardly revised 2.1% fall in the March quarter, figures from the Australian Bureau of Statistics (ABS) showed on Thursday.

However, the outcome was far better than market forecasts for an 8.4% slump.

· Oil treads water as huge Gulf of Mexico storm shuts output

Oil prices were in a holding pattern on Thursday as a massive storm in the Gulf of Mexico raced towards the heart of the U.S. oil industry, forcing oil rigs and refineries to shut, with little impact expected on supply as oil stockpiles remain high.

U.S. West Texas Intermediate crude futures fell 4 cents, or 0.1%, to $43.35 a barrel by 0148 GMT, erasing Wednesday’s slight rise.

Brent crude futures for October, which expire on Friday, inched up 5 cents to $45.69 a barrel after falling 22 cents, or 0.5%, on Wednesday. The more active November Brent contract rose 2 cents to $46.18

The threat from Hurricane Laura pushed the market higher earlier in the week, but the storm is not expected to affect supplies much because oil and product inventories remain high due to the coronavirus pandemic’s hit to fuel demand.

Reference: CNBC, Reuters