US stocks poised to tick lower at the day

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Yuan Poised for Worst Month on Record After 7 Barrier Broken

© Reuters.  Yuan Poised for Worst Month on Record After 7 Barrier Broken © Reuters. Yuan Poised for Worst Month on Record After 7 Barrier Broken

(Bloomberg) — China’s yuan is headed for a record monthly plunge as an intensifying trade war with the U.S. damages investor confidence.

The currency has plummeted 3.9% this month, the biggest loss since January 1994, when the modern exchange rate regime was adopted. The slump past the 7 level for the first time since the financial crisis comes as China-U.S. trade tensions escalate. Fresh signs of a slowing economy and bets on further monetary easing have also helped fuel the retreat.

Without any clear signs of progress in trade negotiations, the “outlook will deteriorate, both for the Chinese economy and markets,” Dariusz Kowalczyk, senior emerging market strategist at Credit Agricole (PA:), wrote in a note dated Monday. The yuan may decline in the near term to 7.3 per dollar, he said.

There are signs the People’s Bank of China is growing uncomfortable with the yuan’s drop. It set the daily reference rate at stronger-than-expected levels for a fifth straight session on Tuesday. Sustained weakness risks creating a cycle of capital outflows and more currency weakness, a scenario that may lead to financial instability.

The yuan plunged to the weakest level since February 2008 this week after President Donald Trump and the Chinese government exchanged tariff threats on Friday. The PBOC may allow the currency to slide to 7.5 by the end of this year as it uses depreciation to counter the tariffs, Bank of America Merrill Lynch (NYSE:) strategists led by Claudio Piron wrote in a note. The currency slipped 0.14% to 7.1621 a dollar as of 11:55 a.m. in Shanghai.

The yuan’s 14-day relative strength against the dollar has fallen below 30, reflecting strong selling momentum. The index has dipped below this level for 14 days in August, the most in a month since May.

Not only has the yuan weakened against the greenback, it’s also at a record low against a basket of its peers. The Bloomberg replica of the CFETS Index — which tracks the yuan against the currencies of 24 trading partners — has fallen to 91.1, the lowest level since the gauge was introduced in 2015.

The offshore yuan’s forward points, a gauge of liquidity and bearish bets on the currency, jumped to the highest level since October last week. The forward curve could rise, as a tumbling yuan prompts more Chinese companies to buy foreign exchange and as Beijing tightens liquidity to squeeze short sellers, Citigroup Inc (NYSE:). strategists led by Sun Lu wrote in a note.

Still, the PBOC can rein in depreciation if it wants. On Tuesday, the central bank set its daily fixing 204 pips stronger than the level that analysts and traders projected in a Bloomberg survey. That is the largest such bias since June. To beat back bears, Beijing can also issue verbal warnings, sell bills in Hong Kong to boost the cost of shorting and directly intervene by dumping the greenback.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Dollar pressured before payrolls data, poised for worst weekly performance for 2019

© Reuters. FILE PHOTO: U.S. dollar notes are seen in front of a stock graph in this picture illustration © Reuters. FILE PHOTO: U.S. dollar notes are seen in front of a stock graph in this picture illustration

By Daniel Leussink

TOKYO (Reuters) – The dollar was under pressure on Friday and was poised for its worst weekly performance for the year, as investors waited on a key U.S. jobs report that is expected to back expectations for a near-term Federal Reserve rate cut to support a slowing economy.

Not helping the U.S. currency was the European Central Bank’s policy review on Thursday where it refrained from hinting at an interest rate cut and instead pushed back the timing of its first rake hike since the 2008 financial crisis.

Market participants’ immediate focus was on the U.S. non-farm payrolls data for May due later on Friday, and early signs weren’t good with hiring expected to have dropped in a boost to rate doves and dollar bears.

A slowdown in the U.S. labor market was evident in a worse-than-expected ADP (NASDAQ:) National Employment Report released on Wednesday, which showed private U.S. employers added 27,000 jobs in May, the smallest monthly gain in more than nine years.

“The ADP report was unexpected so it’s hard to know what to expect” from the U.S. jobs data, said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

The dollar has been hit in recent weeks by the rising expectations for a U.S. rate cut before year-end, as an escalating China-U.S. trade row hurts business confidence and growth. Recent comments from Fed officials have also pointed to an easing in coming months.

Markets have priced in slightly more than a 50% probability rates will be cut 25 basis points by the end of July and one more cut would follow by the end of the year, according to the CME Group’s FedWatch Tool.

Against a basket of six peers, the dollar was a shade lower at 97.029, trading about 0.3% above an eight-week low of 96.749 brushed on Wednesday.

The index was on course for a 0.75% loss this week, its worst weekly performance since early December last year.

The euro jumped half a percent during the previous session as markets had positioned on a more dovish signal from the ECB and an acknowledgement of weak economic growth in the bloc.

The single currency was steady at $ 1.1275 and was set for a weekly gain of nearly 1%, its best weekly performance against the dollar since late September last year, when it rose nearly 1.1%.

“I think the ECB policy was quite dovish as the forward guidance was prolonged, but the market was hoping the bank would be even more dovish,” said Daiwa’s Ishizuki.

Elsewhere in the currency market, the dollar was 0.05% higher at 108.455 yen.

Market participants were also keeping tabs on developments around Washington’s trade negotiations with both China and Mexico.

U.S. President Donald Trump said on Thursday he would decide whether to carry out his threat to hit China with tariffs on at least $ 300 billion in the country’s goods after a G20 meeting late this month.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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WADA poised to decide fate of Russian agency

© Reuters. FILE PHOTO: A woman walks into the head offices of WADA in Montreal © Reuters. FILE PHOTO: A woman walks into the head offices of WADA in Montreal

By Steve Keating

TORONTO (Reuters) – A long-running doping scandal could be heading towards a conclusion when the World Anti-Doping Agency (WADA) receives a report from their Compliance Review Committee (CRC) next week that could confirm Russia’s conditional reinstatement.

Having, after much stalling, allowed a WADA inspection team access to data in a tainted Moscow laboratory on Thursday, Russian authorities will no doubt say they have met the final demand laid out in a Roadmap to Compliance and call for the conditional status of the Russian Anti-Doping Agency (RUSADA) to be lifted.

The CRC will meet members of the inspection teams at WADA’s Montreal headquarters on Monday and Tuesday then submit a report to the executive committee recommending whether RUSADA be declared compliant or be slapped with new sanctions.

Tensions and suspicions are running high after a WADA inspection team was prevented from retrieving the data last month when Russian authorities said the equipment being used was not certified under Russian law.

Access to the data before a Dec. 31 deadline had been a condition of WADA’s September decision to provisionally reinstate RUSADA.

A second WADA inspection team went to Moscow and began retrieving data on Thursday but some athletes’ groups and anti-doping organizations have expressed concern over whether all the material would be handed over and whether it had been tampered with.

Once WADA is in possession of the data Russian authorities must also ensure that any re-analysis of samples is completed by June 30 this year.

Under increasing pressure to act swiftly and decisively, WADA said on Saturday that it would make the report available to the executive committee no later than Thursday and announce a ruling on Jan. 22.

If RUSADA is found non-compliant and WADA imposes new sanctions, Russian authorities can appeal against the decision to the Court of Arbitration for Sport (CAS), prolonging what is already one of the longest-running doping scandals.

RUSADA was suspended in 2015 after a WADA-commissioned report by Canadian lawyer Dick Pound outlined evidence of state-backed, systematic doping in Russian athletics, allegations Moscow has denied.

A second commission led by another Canadian sports lawyer, Richard McLaren, in 2016 uncovered more evidence of an elaborate state-sponsored doping scheme across many sports triggering outrage from clean athletes and anti-doping groups that led to Russian athletes being banned from two Olympics, whistleblowers living in hiding and millions of dollars being spent on investigations.

The doping crisis has created chaos across the sporting world with athletes demanding action and reform.

Anti-doping hardliners such as United States Anti-Doping Agency (USADA) chief Travis Tygart have demanded that Russia remains suspended until the data can be confirmed and samples retested while International Olympic Committee (IOC) president Thomas Bach has not waited for the WADA ruling, recently declaring that Russia had paid its debt to the international sporting community.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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