Date: June10, 2019
Daily World Economic and Financial News
(CNBC): June10, 2019--- The dollar was little changed on Thursday, on track to post a fourth straight month of gains, as the trade stand-off between China and the United States prompted traders to put money into perceived safe currencies including the greenback. Safe-haven demand lifted the dollar to a 2-year high against a basket of currencies last week. Appetite for the greenback was somewhat curbed on Thursday as Wall Street stabilized following steep losses due to the trade worries and U.S. bond yields briefly rose before resuming their recent fall.
(CNBC): June02, 2019--- The euro and sterling held above key support levels at $1.11 and $1.26, respectively, also restraining the greenback’s momentum, analysts said.
(CNBC): June02, 2019--- In late U.S. trading, an index that tracks the dollar against six major currencies was down -0.01% at 98.151. It reached 98.371 a week ago, its strongest since May 2017.
(CNBC): June02, 2019--- The dollar index has increased 0.76% in May, putting it on track for four straight months of gains. Its strength has persisted even as traders have increased their bets on multiple rate cuts by the Federal Reserve.
The greenback will likely extend its monthly winning streak against the euro, which began in January. Signs of a sagging euro zone economy, together with worries about the rise of euro-sceptic political parties within EU member countries, have hurt the zone’s common currency
(CNBC): June02, 2019--- The euro was up 0.04% at $1.1135, within striking distance of $1.11055 hit a week ago, which was a two-year low. The dollar has also remained resilient against the yen, despite the risk-averse environment.
(CNBC): June02, 2019--- The greenback was 0.05% lower at 109.535 yen, staying above a two-week low set on Wednesday. Analysts said the yen, a safe-haven currency backed by Japan’s status as the world’s biggest creditor nation, remained relatively weak because of domestic demand for dollars.
(REUTERS): June02, 2019--- The euro rose against sterling for a second straight day on Friday as the battle to succeed Prime Minister Theresa May sapped appetite for the British pound, putting it on course for its worst monthly loss against the single currency in two years.
(REUTERS): June02, 2019--- The dollar was little changed on Thursday, on track to post a fourth straight month of gains, as the trade stand-off between China and the United States prompted traders to put money into perceived safe currencies including the greenback.
(REUTERS): June02, 2019--- Oil prices fell to their lowest since March after data showed a very slight decline in U.S. oil inventories that remain near a 22-month high. West Texas Intermediate futures, the U.S. oil benchmark, ended 3.8% lower at $56.59 a barrel on the New York Mercantile Exchange, marking the lowest closing price since March 8, and the fifth decline over the past seven sessions.
This past week was signaled by the absence of first-tier data and persistent fears driving currencies. In such scenario, the EUR/USD pair edged lower, approaching the multi-year low set earlier this May at 1.1106 and contained by sellers aligned around the 1.1200 figure. Still, it remained contained inside the previous week's range.
After being at a brink of sealing a trade deal, all of a sudden the trade relationship between China and the US collapsed, with leading officials from both economies reaching the wires with harsh words about their rivals. Tensions between the two countries fuel concerns about a global economic downturn, with the latest data released confirming that growth in most major economies, continues deteriorating in the second quarter of the year.
A shocker came late Thursday when US President Trump announced tariffs on all Mexican imports. "On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP." Those tariffs will gradually increase until the illegal immigration problem is solved, according to his words, becoming 10% starting July 1st.
On Friday, German's Merkel, speaking at Harvard, slammed her US counterpart over protectionism and trade conflicts, saying that protectionism jeopardizes the very foundations of prosperity. Trade-war in full fashion.
Fear turned into panic, resulting in US Treasury yields falling to fresh two-year lows and worldwide equities collapsing. The effect on the EUR/USD pair, however, was limited, although the high-yielding shared currency gained some ground by the end of the week, as the dollar sold-off vs. safe-havens' Gold and Yen.
In balance, data released these last few days played in favor of the greenback, as despite revised modestly lower, US Q1 GDP was estimated at a solid 3.1%, while core PCE inflation also came in-line with the market's expectations. Housing data was mixed, although employment figures showed signs of improvement. In Europe, on the other hand, the focus was on Germany, as all the numbers released by the country came below the market's expectations, with Retail Sales falling 2.0% in April and inflation in May shrank by more-than-anticipated.
Next week, Markit will confirm the final versions of May PMI, while the US will release the official manufacturing and services indexes. The ECB will have its monetary policy meeting, while the US will release the monthly Nonfarm Payrolls report. Data is now relevant in terms of indicating the degree of economic growth's deterioration, with Trump's protectionism.
International & Financial Terms
- Trading Disruption: An event that occurs when there is a suspension of—or limitation imposed on—trading by the relevant Exchange or Related Exchange.
- Transaction supplement: The short confirmation that evidences a transaction under a Master Confirmation Agreement (MCA)—commonly referred to as a “short form”.
- Unique Swap Identifier (USI)/Unique Transaction Identifier (UTI): A universal and unique code identifying a single transaction made in the OTC derivatives market.
- Valuation Date: A date on which an asset is valued or a collateral call is made.
Compiler: A Bank Dealing Room Section
Management of International Deputy /The Expert In Charge Of Dealing Room