· The dollar strengthened against the pound on Friday after Reuters reported a source close to French President Emmanuel Macron said an extension to the negotiations for Britain’s exit from the European Union was not justified at this stage.
“France wants a justified and proportionate extension. However, we have nothing of the sort so far. We must show the British that it is up to them to clarify the situation and that an extension is not a given,” the source told Reuters.
Against the pound, the dollar was up 0.29% to $1.281. Since hitting a 5-1/2-month high on Monday, sterling has fallen nearly 1.5% after Prime Minister Boris Johnson’s timetable to pass legislation that would withdraw Britain from the EU was rejected by the British parliament, the reason for the requested extension.
On Thursday, Johnson called for a general election on Dec. 12 in an effort to break the political deadlock over Brexit.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.819, sliding from an earlier high of 97.849.
The Japanese yen traded at 108.68, strengthening from 108.77 seen earlier. The Australian dollar changed hands at $0.6820, following a low of $0.6815 seen earlier.
· The Chinese yuan is expected to show some near-term weakness against the U.S. dollar, according to investment bank Goldman Sachs.
On Friday afternoon, the onshore yuan changed hands at 7.0663 at 2:28 p.m. HK/SIN after the People’s Bank of China fixed the day’s midpoint for the exchange rate at 7.0749.
“We forecast a rise back to 7.20 versus the dollar, so trading towards the weak end of the band around the fix,” Zach Pandl, co-head of global foreign-exchange rates and emerging markets strategy at Goldman Sachs, told CNBC’s “Squawk Box” on Friday.
That move will likely happen “over the course of the next month, is our best guess,” he added.
· The U.S. and China have made progress in trade discussions and have come close to finalizing parts of a phase one deal, the Office of the U.S. Trade Representative said Friday.
The agency issued a statement outlining the status of discussions following a conversation that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had with Chinese Vice Premier Liu He.
“They made headway on specific issues and the two sides are close to finalizing some sections of the agreement,” USTR said. “Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.”
The USTR provided no details on the areas of progress.
· Chinese Vice Premier Liu He had a phone call with U.S. trade officials as both countries confirmed technical consultations on some parts of a trade agreement were basically completed, China’s Ministry of Commerce said in a statement on Saturday.
Liu spoke with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin on Friday night, the statement said.
Both sides confirmed the United States will import Chinese-made cooked poultry and catfish products, while China will lift a ban on U.S. poultry, according to the statement. The two countries also agreed on the application of public health information systems for meat products, according to the statement.
The Commerce Ministry said top negotiators from both nations will hold a phone call again soon, and will continue to have negotiations.
· Thai exporters facing the loss of duty-free status for certain goods sold to the United States could incur losses of up to 1.8 billion baht ($59.68 million) per year, Commerce Minister Jurin Laksanavisit told reporters on Sunday.
The United States on Friday suspended duty-free treatment for $1.3 billion worth of Thai imports, including seafood products, under its Generalized System of Preferences (GSP) program, saying Thailand did not “afford workers in Thailand internationally recognized worker rights.”
The tariffs that would take effect in six months would be 4-5% instead of zero, Jurin said.
· The 27 European Union countries that will remain after Brexit hope to agree on Monday to delay Britain’s divorce until Jan.31 with an earlier departure possible should the factious UK parliament ratify their separation deal, sources said.
Diplomatic sources told Reuters the bloc’s 27 EU ambassadors would meet at 0900 GMT on Monday in Brussels to agree on the three-month delay from the current Brexit date of Oct. 31.
The latest plan envisages that Britain could also be out on Dec.1 or Jan.1 should the parliament ratify the agreement in November or December, respectively, according to diplomats who deal with Brexit in the EU hub, Brussels.
· Oil rose on Friday and posted the biggest weekly gain in more than a month as support from falling U.S. crude inventories, optimism over a U.S.-China trade deal and possible action from OPEC and its allies to extend output cuts outweighed broader economic concerns.
Brent crude gained 24 cents to settle at $61.91 per barrel. The global benchmark was set for a weekly gain of almost 4%. West Texas Intermediate (WTI) gained 43 cents to settle at $56.66.
The strong weekly performance was underpinned by the surprise drop in U.S. inventories, with crude stocks dropping by about 1.7 million barrels last week.
· President Donald Trump on Sunday said he’s interested in making a deal with ExxonMobil or another energy company to tap Syrian oil reserves.
· President Donald Trump announced on Sunday that the leader of the so-called Islamic State Abu Bakr al-Baghdadi died in an overnight U.S. military operation in Syria, delivering a major blow to the terrorist group even as American forces withdraw from the area.
Reference: CNBC, Reuters
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