· Dollar drifts as markets look for certainty on U.S. stimulus
The U.S. dollar treaded water against most major currencies on Thursday as U.S. stimulus talks remained the focus for markets with trading buffeted over recent days by the extent of progress made on the potential size of the aid package.
The dollar index was nearly flat against a basket of currencies at 92.792, having marked its lowest level since Sept. 2 overnight.
Analysts said the dollar was also pressured by a surge in currencies such as the sterling, which jumped to a six-week high overnight after Britain’s chief Brexit negotiator said talks with the European Union will resume on Thursday afternoon.
In Asian trade, the pound’s uptick paused, down 0.15% at $1.3127.
The euro edged 0.16% lower against the dollar to $1.8420, a fraction below a one-month high of $1.8805 hit on Wednesday.
Traders are also awaiting the final debate between President Trump and Democratic rival Joe Biden later in the day, with the key feature this time around being a mute button to allow each candidate to speak uninterrupted.
The Japanese yen drifted away from its four-week high of 104.345 marked overnight, last sitting at 104.74 against the greenback.
“Dollar/yen trades are especially on wait-and-see ahead of the presidential debate,” said Sumino Kamei, senior analyst at MUFG Bank.
Elsewhere, the Chinese yuan retreated, last changing hands at 6.6669 at midday, after hitting its strongest level since July 2018.
· The dollar remains vulnerable to ‘significant depreciation,’ warns Standard Chartered
Robertsen said he sees a “pretty good dollar depreciation trend” over the next few years.
He argued the outperformance of U.S. assets has been a “big driver” of dollar appreciation over the last 10 years, with the S&P 500 beating the MSCI Emerging Markets equity index by 100 percentage points in that period.
On Tuesday, prominent economist Stephen Roach told CNBC that conditions are ripe for a sharp weakening in the greenback in the coming year, as he forecast a 35% decline of the U.S. dollar decline by the end of 2021.
· Final debate offers Trump a late chance to reshape presidential race
President Donald Trump gets a final chance to make his case for re-election before a vast audience of Americans when he squares off against Democratic rival Joe Biden on Thursday in their last debate before the Nov. 3vote.
Biden significantly in national polls less than two weeks before Election Day, though the contest is much tighter in some key battleground states.
Opinion polls show there are relatively few undecided voters. A record 42 million Americans have already cast ballots ahead of the debate in Nashville, Tennessee, meaning Trump’s window to influence the outcome of the race may be closing.
Debate topics will include the pandemic, race relations, climate change and national security. The Trump campaign argued that the entire debate should be focused on foreign policy.
Trump is expected to return to a line of attack that surfaced in the first debate, accusing Biden and his son Hunter Biden of unethical practices regarding Hunter Biden’s business dealings in Ukraine while his father was vice president. No evidence has been verified that support the corruption allegations by Trump and his aides, and Biden in the first debate called them false and discredited.
· Economic recovery could slow in Q4 after ‘steroid of fiscal stimulus’ fades, JPMorgan Asset Management says
While it appears that the economy has sharply bounced back from the pandemic’s blow, this is actually a “steroid kind of recovery,” JPMorgan Asset Management’s David Kelly told CNBC
“We have seen what looks like a V-shaped recovery, but it’s really V-interrupted — it’s half of V,” the chief global strategist said. A V-shaped recovery is one in which an economy sharply rises after a recession.
He explained that when the shot in the arm of fiscal stimulus wears off, growth will slow down again.
“It looks like an economic recovery, but it’s really sort of a steroid kind of recovery. As the steroid of fiscal stimulus is removed, the economy is going to grow more slowly … it’s going to grow much more slowly in the fourth quarter than it did in the third,” Kelly told CNBC on Thursday.
Millions of Americans are waiting for more federal aid to meet their food and housing needs during this crisis, as Washington remains locked in a stalemate over further coronavirus stimulus.
But Kelly says the country will get a stimulus package after the November presidential elections are over.
· Pompeo says U.S. designating six more Chinese media firms as foreign missions
U.S. Secretary of State Mike Pompeo announced on Wednesday the State Department was designating the U.S. operations of six more China-based media companies as foreign missions, a move he said was aimed at pushing back against communist propaganda.
Pompeo also told a State Department news conference the United States would launch a dialogue on China with the European Union on Friday and that on Sunday he would begin a trip to India, Sri Lanka, the Maldives and Indonesia.
He said he expected the meetings would include discussions about how “free nations can work together to thwart threats posed by the Chinese Communist Party.”
The State Department named the newly designated publications as the Yicai Global, Jiefang Daily, the Xinmin Evening News, Social Sciences in China Press, the Beijing Review, and the Economic Daily. It brought to 15the number of Chinese media outlets so designated this year.
It was the latest U.S. step to curb Chinese activity in the United States in the run-up to the Nov. 3 presidential election, in which President Donald Trump has made a tough approach to China a key foreign policy theme.
· Despite coronavirus, Indian traders stock up in hopes of festive cheer
Indian businesses are stocking up more ahead of this year’s big festival season than at any time in the last five years, expecting people whose earnings were relatively unaffected by the pandemic to spend the money they saved during months of lockdowns.
· Taiwan says it is not seeking arms race with China after new U.S. arms sale
· Thailand lifts protest ban that backfired
Thailand on Thursday rolled back an emergency decree aimed at ending months of protests against the government and monarchy that had only inflamed anger and brought tens of thousands of people onto Bangkok streets.
· Oil struggles as U.S. gasoline stocks build weighs on demand outlook
Oil prices struggled on Thursday after heavy losses overnight, with a build in U.S.
gasoline inventories pointing to a deteriorating outlook for fuel demand as coronavirus cases soar in North America and Europe.
Brent crude LCOc1 futures were down 1 cent, or 0.02%, to $41.72 a barrel at 0636 GMT having slumped 3.3% on Wednesday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were 4 cents lower, or 0.1%, to $39.99 a barrel, after skidding 4% the previous day.
U.S. gasoline stocks USOILG=ECI rose by 1.9 million barrels in the week to Oct. 16, the Energy Information Administration (EIA) said, compared with expectations for a 1.8 million-barrel drop.[EIA/S]
Reference: Reuters, CNBC
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