· The dollar fell to a near 1-1/2-month low against a group of currencies on Thursday after data showed U.S. consumer prices increased less than expected in August, changing traders’ views on an acceleration in domestic inflation.
Signs of reduced trade tensions between China and the United States after Washington reached out to Beijing on Wednesday to restart trade talks also pressured the greenback.
Despite the CPI miss, traders did not change their view the Federal Reserve would raise key short-term interest rates by a quarter point to 2.00 percent-2.25 percent at its next policy meeting in two weeks. They also anticipated the Fed would increase rates for a fourth time this year in December.
An index that tracks the dollar against six major rivals broke below its 100-day moving average, which is seen as a bearish signal, to a near six-week low at 94.428. At 3:14 p.m. (1914 GMT), it was down 0.26 percent at94.551.
The common currency rose to a two-week peak against the dollar, at $1.17010, before subsiding to $1.16900, up 0.54 percent on the day, EBS data showed.
The pound hit a six-week high versus the dollar, at $1.3124. It was last at $1.3105, up 0.44 percent.
· Both the European Central Bank and Bank of England, as expected, left interest rates unchanged on Thursday.
· The ECB signalled it was on track to dial back its bond purchases later this year, while the BOE highlighted concerns from Brexit.
· The lira has risen against the dollar after Turkey's central bank hiked interest rates to 24% on Thursday - the biggest increase in President Tayyip Erdogan's 15-year rule.
· Turkey’s central bank raised its benchmark rate by 625 basis points on Thursday in a bid to shore up the lira and soothe investor concern about President Tayyip Erdogan’s influence on monetary policy.
Turkey’s lira rallied 3.99 percent at 66.0921 per dollar. It had hit a record low of 7.2400 in mid-August, raising investor expectations for the central bank to tighten monetary policy and arrest the currency’s slide.
· U.S. consumer prices rose less than expected in August as increases in gasoline and rents were offset by declines in healthcare and apparel costs, and underlying inflation pressures also appeared to be slowing.
Despite the moderate consumer price increases last month, inflation remains underpinned by a tightening labor market and robust economic growth. Labor market strength was reinforced by other data on Thursday showing the number of Americans filing for unemployment aid dropped last week to near a 49-year low.
The Consumer Price Index increased 0.2 percent last month after a similar gain in July. In the 12 months through August, the CPI rose 2.7 percent, slowing from July’s 2.9 percent advance. Excluding the volatile food and energy components, the CPI edged up 0.1 percent. The so-called core CPI had increased by 0.2 percent for three straight months.
In the 12 months through August, the core CPI gained 2.2 percent after rising 2.4 percent in July. Economists polled by Reuters had forecast the CPI climbing 0.3 percent and the core CPI gaining 0.2 percent in August.
The inflation report came on the heels of data on Wednesday showing producer prices falling in August for the first time in 1-1/2 years.
August’s tepid consumer price gains did not change expectations that the Federal Reserve will raise interest rates at its Sept. 25-26 policy meeting. The U.S. central bank has lifted rates twice this year.
· There may be room for the U.S. jobs market to improve further without pressure on inflation, an argument for the Fed to be patient as it considers further rate increases, Atlanta Federal Reserve bank president Raphael Bostic said on Thursday.
Atlanta Federal Reserve bank President Raphael Bostic said he is taking a “wait and see” approach to whether one or two more rate increases are appropriate for the year, and feels the U.S. jobs market may still have room to improve.
· China will not buckle to U.S. demands in any trade negotiations, the major state-run China Daily newspaper said in an editorial on Friday, after Chinese officials welcomed an invitation from Washington for a new round of talks.
· President Donald Trump contended Thursday that he faces no pressure to strike a trade deal with China as Washington and Beijing exchange shots in a mounting trade conflict.
· Former Commerce Secretary Carlos Gutierrez, who served under former President George W. Bush, said he worries that U.S. tariffs would push China "over the cliff" and end up hurting the global economy.
"The moment China's growth rate declines, we will regret it," Gutierrez told CNBC on Thursday.
· Canadian Prime Minister Justin Trudeau said on Thursday he wanted a good NAFTA deal as soon as possible, but did not answer directly when asked if he agreed with Washington that the end of September was the final deadline for talks.
· U.S. Congress negotiators on Thursday moved to put off until after the Nov. 6 elections decisions on future funding for President Donald Trump’s multibillion-dollar southwest border wall, as lawmakers advanced legislation funding many other government programs.
Racing against a Sept. 30 deadline when the current fiscal year ends, Republicans and Democrats were showing unusual cooperation in trying to fund most federal agency functions and avoid an embarrassing government shutdown about a month before congressional elections.
· A Republican-led panel in the U.S. House of Representatives voted on Thursday to make permanent individual tax cuts from President Donald Trump’s 2017 tax overhaul, a move widely seen as a partisan ploy to help Republican candidates in the Nov. 6 congressional elections.
Members of the tax-writing House Ways and Means Committee voted 21-15 along party lines to send the measure to the House floor for a full chamber vote expected by Oct 1. But the tax cuts are likely to be dead on arrival in the Senate, where they would need Democratic support to pass.
· U.S. President Donald Trump’s former campaign chairman Paul Manafort is close to reaching a plea deal with Special Counsel Robert Mueller, sources familiar with the matter said on Thursday.
Earlier, ABC News, citing three unnamed sources with knowledge of the discussions, said Manafort had tentatively agreed to a plea deal and it was expected to be announced at a court hearing on Friday in Washington.
· U.S. House Speaker Paul Ryan said on Thursday he had “no reason” to dispute Puerto Rico’s official death toll of 3,000 from last year’s Hurricane Maria, speaking after his fellow Republican President Donald Trump accused Democrats of inflating the death toll to make the president look bad.
· Oil prices fell more than 2 percent on Thursday, with Brent slipping back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand even as supply tightens.
Brent crude oil LCOc1 fell $1.56, or 2 percent, to settle at $78.18 per barrel. The global benchmark on Wednesday hit $80.13, its highest level since May 22.
U.S. light crude CLc1 settled down $1.78, or 2.5 percent, at $68.59 a barrel.
Both benchmarks marked their biggest single day percentage drop in almost one month.
Reference: Reuters, BBC, CNBC
Thai
Eng