· Dollar rebound falters as Fed's Powell strikes dovish tone
The dollar’s rebound from a near three-year low faltered on Friday after U.S. Federal Reserve Chair Jerome Powell said interest rates would not rise any time soon.
The release of details of President-elect Joe Biden’s $1.9 trillion stimulus on Thursday failed to give the greenback additional support, with the main points of the plan already reported by the media.
Bitcoin continued to recover after a nearly $12,000 plunge from the record $42,000 reached last week, briefly topping $40,000 overnight.
The dollar index has rallied after reaching its lowest level since March 2018 last week, as the prospect of more stimulus weighed on U.S. government bonds, sending the benchmark 10-year Treasury yield above 1% for the first time since March.
Although many analysts predict the greenback will resume the decline that saw it slide almost 7% last year versus major peers as the global economy recovers from the coronavirus pandemic, there is growing concern that the rise in yields will temper that weakness.
The dollar index was little changed at 90.319 after drifting slightly lower overnight. It rebounded to as high as 90.73 at the start of this week from as low as 89.206 on Jan. 6.
The dollar was little changed at 103.77 yen after slipping 0.1% overnight.
The euro eased 0.1% to $1.21395, on track for a three-day decline.
The riskier Aussie dollar slid 0.3% to 77.560 U.S. cents, tempering the previous session’s 0.6% rise.
In the spot market, onshore yuan opened at 6.4673 per dollar and was changing hands at 6.4703 at midday, about 0.1% or 57 pips firmer than the previous late session close.
Bitcoin slid about 1% to $38,729, after climbing as high as $40,112.78 overnight.
· Pence vows to honor U.S. history, ensure safe inauguration of new president
U.S. Vice President Mike Pence on Thursday vowed to uphold American history and ensure a safe transition of power to President-elect Joe Biden, eight days after supporters of U.S. President Donald Trump laid siege to the U.S. Capitol.
Pence made the remarks before a security briefing at the headquarters of the Federal Emergency Management Agency, and during a meeting with National Guard troops guarding the U.S. Capitol, where Pence was among top U.S. officials forced into hiding during last week’s attack.
· U.S. Targets Xiaomi, Cnooc in Trump’s Late Anti-China Push
The Trump administration blacklisted Chinese smartphone manufacturer Xiaomi Corp. for alleged military links along with the country’s third-biggest oil company over its drilling in the South China Sea, part of a final push to ratchet up pressure on Beijing before President-elect Joe Biden takes office.
Xiaomi was one of nine firms added to the Defense Department’s list of Chinese military companies, a move that will restrict U.S. investments in its securities. Other firms include state-owned planemaker Commercial Aircraft Corp. of China Ltd., or Comac, which is central to China’s goal of creating a narrow-body plane that can compete with Boeing Co. and Airbus SE.
· Trump's China tech war backfires on automakers as chips run short
Automakers around the world are shutting assembly lines because of a global shortage of semiconductors that in some cases has been exacerbated by the Trump administration’s actions against key Chinese chip factories, industry officials said.
The shortage, which caught much of the industry off-guard and could continue for many months, is now causing Ford Motor Co, Subaru Corp and Toyota Motor Corp to curtail production in the United States.
· China says firmly opposes new U.S. sanctions
China firmly opposes new sanctions by the United States on its officials and companies over accusations of misdeeds in the disputed South China Sea, as well as an investment ban on nine more of its firms, the foreign ministry said on Friday.
Ministry spokesman Zhao Lijian made the comment at a news briefing in Beijing.
· PBOC conducts small net drain of medium-term liquidity, suggesting tightening bias
China’s central bank conducted a small net drain in medium-term loans in the banking system on Friday and kept the rates on the facility unchanged, a move investors say suggests a shift to a tightening bias in monetary policy.
The People’s Bank of China (PBOC) said in a statement it injected 500 billion yuan ($77.28 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions and kept the rate on the loans steady at 2.95% from previous operations.
· China bans two WHO coronavirus investigators from entering country after positive antibody tests
A team of investigators from the World Health Organization (WHO) landed in Wuhan, China, without two members on Thursday, more than a year after the first coronavirus case was detected in the city.
The team is probing the virus’s source, but in what is interpreted as a sign of Beijing’s efforts to retain some control surrounding the investigation, two scientists were barred from entering China after testing positive for coronavirus antibodies, the WHO said. The remaining scientists will start their investigation while undergoing a two-week quarantine.
· UK economy shrank in November as new lockdown hit
Britain’s economy shrank by 2.6% in November, the first monthly fall in output since the country was under its initial COVID lockdown last April as new restrictions were imposed to slow the spread of the disease.
However, the scale of the decline was much smaller than most analysts expected - a Reuters poll had pointed to a 5.7% contraction.
· With visitors barred by Covid-19, Hong Kong logs just 3.57 million arrivals in 2020, the lowest number on record
Plagued by the collapse of travel amid the coronavirus pandemic, arrivals to Hong Kong plummeted nearly 94 per cent year on year in 2020 to just 3.57 million, the lowest number on record for the once-mighty tourism hub.
· India's protesting farmers, government to hold new round of talk
The Indian government will hold new talks with the leaders of tens of thousands of farmers camped on the outskirts of New Delhi for almost two months protesting for the repeal of new agricultural laws they say threaten their livelihoods.
· Quake in Indonesia's Sulawesi kills at least 11, injures hundreds
A 6.2-magnitude earthquake on Indonesia’s Sulawesi island killed at least 11 people and injured hundreds on Friday, with the country’s meteorological agency warning of the risk of more aftershocks, potentially strong enough to produce a tsunami.
· Oil drops as Chinese lockdowns, U.S. unemployment data drains rally
Oil prices fell on Friday as concerns about Chinese cities in lockdown due to coronavirus outbreaks tempered a rally driven by strong import data from the world’s biggest crude importer and U.S. plans for a large stimulus package.
Brent was down 71 cents, or 1.2%, at $55.71 by 0758 GMT, after gaining 0.6% on Thursday. U.S. West Texas Intermediate crude was 46 cents, or 0.9%, lower at $53.11 a barrel, having risen more than 1% the previous session.
Brent is heading for the first weekly decline in three weeks, while U.S. crude is on track for a third weekly gain.
Reference: CNBC, Reuters
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