Forex – U.S. Dollar Falls on Weak Manufacturing Data

© Reuters.  © Reuters.

Investing.com – The U.S. dollar fell on Friday, after data showed that manufacturing woes in the country have deepened.

Manufacturing output fell to 0.6% in October, the most since May 2018. Excluding autos, output was down 0.1% last month, the Federal Reserve data showed. Industrial production slipped 0.8%, while the Empire State Manufacturing Index tumbled to 2.9 from 5.0 expected.

Diminishing concerns over U.S. trade did nothing to ease forex traders. The , which measures the greenback’s strength against a basket of six major currencies, fell 0.2% to 97.863 as of 11:08 AM ET (16:08 GMT).

White House economic advisor Larry Kudlow said on Thursday that the U.S. and China were close to securing a trade deal. His comments come after a week of volatility after reports that the two sides had hit a snag over trade talks. Chinese media on Friday fleshed out arguments that Chinese demand for U.S. farm products is nowhere near the level of purchases that Washington is insisting on in order to seal a partial phase one deal.

U.S. Commerce Secretary Wilbur Ross said Friday that U.S. and Chinese officials would hold a call later in the day, but added that the U.S. could still impose tariffs on Chinese goods, which are scheduled for Dec. 15.

The safe-haven Japanese yen was lower with up 0.3% to 108.75.

Elsewhere, the euro was higher, with up 0.3% to 1.1051 while rose 0.2% to 1.2901.

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More weak exports data, this time from South Korea

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Forex – U.S. Dollar Weak As China Signals Openness to Trade Deal  

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Investing.com – The U.S. dollar was weak despite reports that China is open to a partial trade deal despite the U.S. blacklisting Chinese firms earlier in the week, as traders await the Federal Reserve latest meeting minutes for clues on the direction of interest rates.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.1% to 98.762 as of 11:03 AM ET (15:03 GMT). Investors were also waiting for the minutes from the Federal Reserve’s latest policy meeting at 2:00 PM ET (18:00 GMT) for clues on whether or not the central bank will cut rates.

China is willing to accept a trade deal, Bloomberg reported, and has even offered to increase how many soybeans it buys from American farmers as a measure of goodwill before trade talks. Chinese Vice Premier Liu He is due to arrive this week in Washington for trade talks and is expected to meet U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

The Japanese yen, which is seen as a safe haven in times of market turmoil, fell, with rising 0.3% to 107.36.

Elsewhere, was flat at 1.2212 while gained 0.2% to 0.0977 as it appeared that Brexit talks between the EU and U.K. had stopped just a few weeks before the two were set to split. The two sides have struggled to reach an agreement over the Irish backstop, with the EU insisting that there is a way for controls to flow across the Irish border without additional checks and that Northern Ireland remain in the customs union until an alternative solution is found.

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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Citi says prospects for a Brexit deal look weak so brace for delay

LONDON (Reuters) – U.S. investment bank Citi said the Brexit proposals of British Prime Minister Boris Johnson appeared to fall foul of European Union red lines so an extension and election were likely.

“The UK’s proposals seem to fall foul of established EU red lines,” Citi said. “We think the prospects for a deal continue to look weak.

“If a deal is not forthcoming, we expect an extension to be secured and a general election to follow subsequently,” Citi said. “Putting forward new plans at such a late stage, and on a ‘take it or leave it’ basis, sets up a clear blame-game in the event of an extension and a general election.”

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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Forex – U.S. Dollar Inches Up Despite Weak Manufacturing Data

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Investing.com – The U.S. dollar inched up on Wednesday in Asia despite worries about a slowing U.S. economy.

The U.S. dollar index inched up 0.1% even after a weak reading on American manufacturing added to concern about economic growth.

The report from the Institute for Supply Management showed the ISM’s manufacturing PMI fell to 47.8, its lowest level in 10 years. The weak data sent U.S. stocks lower overnight while Asian equities also traded lower in morning trade today.

The USD/CNY pair was unchanged at 7.1477. Celebrations marking 70 years of Communist rule in China were largely overshadowed by protests in Hong Kong, as a demonstrator was shot by police with a live round for the first time since political unrest began in June.

China’s leader Xi Jinping said on Tuesday that the “one country, two systems” principle under which Hong Kong is managed must be upheld, and that “there is no force that can shake the foundation of this great nation.”

“No force can stop the Chinese people and the Chinese nation forging ahead,” he added.

The GBP/USD pair fell 0.2% to 1.2280. In the latest episode of the Brexit saga, U.K. Prime Minister Boris Johnson is set to reveal his final Brexit offer to the European Union later in the day. He made it clear that Britain will not negotiate further should the deal is not engaged and will leave on October 31.

“My friends, I am afraid that after three-and-a-half years people are beginning to feel that they are being taken for fools. They are beginning to suspect that there are forces in this country that simply don’t want Brexit delivered at all,” he will say, according to extracts released by his office.

“Let’s get Brexit done on October 31 so in 2020 our country can move on.”

The USD/JPY pair gained 0.1% to 107.84.

The AUD/USD pair and the NZD/USD pair both inched up 0.1%.

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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Video: Why weak business investment isn’t Trump’s fault (and why he can’t fix it)

Weak business investment isn’t about tariffs, trade or ‘uncertainty’

Central bankers worldwide are lamenting weak business investment.

They think it’s because of worries about global growth due to tariffs and the US-China trade war. They’re wrong. The reason is obvious, but it’s taboo to talk about.

ForexLive

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Forex – Euro Falls on Weak PMI Data; U.S. Dollar Steady

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Investing.com – The euro was weaker on Monday after data showed that Germany’s for the first time in more than six years, raising concerns over a deepening recession in the euro zone’s biggest economy.

Markit’s flash composite (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, fell to 49.1 from 51.7 in the previous month.

Meanwhile, sterling stumbled after the European Union’s Brexit negotiator said it was unlikely a Brexit deal would be made as long as U.K. Prime Minister Boris Johnson insisted the Irish backstop deal be dropped.

“Based on current U.K. thinking, it is difficult to see how we can arrive at a legally operative solution which fulfils all the objectives of the backstop. It is in a very sensitive and difficult phase,” Michel Bernier said on Monday.

The pound stumbled 0.4% to 1.2427 as of 10:59AM ET (14:59 GMT), while slipped 0.2% to 1.0993.

Meanwhile the U.S. dollar was slightly higher amid trade concerns, after a Chinese delegation ended its U.S. trip early. Both sides said the talks were constructive, but neither gave any details about what was discussed. Chinese officials were expected to visit various farming regions but announced on Friday that they were returning home earlier than expected, fueling speculation over trade uncertainty.

The , which measures the greenback’s strength against a basket of six major currencies, rose 0.1% to 98.238.

Elsewhere, rose 0.1% to 1.3275. The Japanese yen, which is seen as a safe haven in times of market turmoil, rose, with falling 0.2% to 107.34.

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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Forex – New Zealand Dollar Down on Weak ANZ Business Confidence Indicator

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Investing.com – The New Zealand dollar dropped to near four-year lows against its U.S. counterpart after data showed the indicator slumped to -52.3 in August.

It was the weakest level since April 2008. The pair fell 0.4% to 0.6309 by 12:20 AM ET (04:20 GMT) following the report, lowest level since September 2015.

The Aussie dollar was also hit by the weak data. The pair slipped 0.1% to 0.6728.

Meanwhile, the U.S. dollar index was little changed at 98.132.

In an interview with Bloomberg, U.S. Treasury Secretary Steven Mnuchin said the U.S. does not intend to intervene in currency markets for now.

“Situations could change in the future but right now we are not contemplating an intervention,” he told Bloomberg.

Mnuchin added that he thinks Chinese negotiators will visit Washington for trade talks, but he declined to confirm whether a previously planned meeting in September would still take place.

“We continue to have conversations. We’re planning for them to come,” Mnuchin said Wednesday, adding that he has been in contact with Yi Gang, the governor of the People’s Bank of China, over what the U.S. has deemed manipulation of the yuan.

“We’ve had conversations with the IMF and directly with our counterparts in China, including the governor of the PBOC,” Mnuchin said. “We will have a separate dialog and discussion on currency as part of the trade discussion but separate from the trade discussion.”

An escalation in the trade tensions between the world’s two largest economies has roiled financial markets in recent days after both sides threatened to slap tariffs on each other’s goods worth billions of dollars.

Separately, U.S. President Donald Trump continued to criticize the Federal Reserve for not being able to “keep up with the competition,” as he reiterated his stance that the central bank should lower rates.

The safe-haven yen rose today as stock markets traded mostly in the red. The pair was down 0.2% to 105.91.

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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Forex – U.S. Dollar Slips After Weak PMI Data; Middle East Tensions

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Investing.com – The U.S. dollar remained near three-month lows on Friday as rising tensions between Iran and the U.S. and weaker-than-expected PMI data kept the dollar down.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.1% to 96.047 by 10:54 AM ET (14:54 GMT).

Weakening manufacturing data on Friday increased support for the Federal Reserve cutting rates in July, with the preliminary purchasing managers index from Markit slipping towards the 50 contraction threshold.

The central bank signaled on Wednesday that they would be willing to cut rates in order to combat slowing global growth and cooling inflation, with investors pricing in a July rate cut at 100%.

Meanwhile, U.S. President Donald Trump said via Twitter that he had come within minutes of firing missiles at Iran in response to it shooting down a surveillance drone, increasing uncertainty over war in the region.

Tensions between the two countries have been fragile since the White House decided to withdraw from the UN-backed 2015 Iran nuclear agreement. The administration most recently accused Iran of last week’s attacks on oil tankers in the Persian Gulf, which Tehran denies.

The dollar rose against the safe haven Japanese yen, with up 0.4% to 107.66.

Elsewhere, the euro was stronger on the weak dollar, with up 0.3% to 1.1328, while slipped 0.2% to 1.2674 and rose 0.2% to 1.3213.

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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Fed officials face weak inflation, but split over what it means

© Reuters. FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore © Reuters. FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore

By Howard Schneider and Ann Saphir

WASHINGTON/SAN FRANCISCO (Reuters) – U.S. Federal Reserve officials were divided Friday over how seriously to treat a slide in inflation, with one top policymaker saying the Fed was “close” to its inflation target and three others warning the weak price increases posed major risks the Fed may need to attack with lower interest rates.

Just how deep that division is and where in the debate the most influential policymakers have staked their ground is going to grip the financial world between now and the conclusion of the Fed’s next meeting on July 31. Interest rate futures markets currently see a 100% probability of a rate cut then, with the only debate in trading circles over whether the cut will 25 basis points or twice that.

Policymakers’ rate projections issued on Wednesday showed a near clean break at the Fed. Roughly half of officials see no rate reduction as likely appropriate this year, and roughly half see a cut of up to half a percentage point as probably warranted — a split that may turn on how quickly officials feel they should act.

The division took shape Friday, in the first hours after the lifting of the central bank’s formal “blackout” for commenting on the results of the last two-day policy session, which concluded Wednesday with the Fed leaving rates on hold in a range between 2.25 and 2.5 percent.

“The economy’s baseline outlook is good — sustained growth, a strong labor market and inflation near our objective,” Fed vice chairman Richard Clarida said on Friday in an interview with Bloomberg Television.

Clarida said there was “broad agreement” that the case for rate cuts had grown stronger in recent weeks. He also said the Fed was ready to act “as appropriate,” a phrase emphasized by Chairman Jerome Powell earlier this month as markets slid over broad global growth and trade concerns.

But Clarida’s description of the current 1.5 percent inflation rate expected this year as “close” to the Fed’s 2 percent target suggested less compulsion to move soon.

Powell, asked after this week’s policy meeting about the danger of delaying any policy move, said “I don’t think the risk of waiting too long is prominent right now.”

Others seemed to disagree.

“Recent indicators of inflation and inflation expectations have been disappointing,” Fed Governor Lael Brainard said on Friday in prepared remarks to a Fed conference in Ohio. With rates so low by historic standards, “basic principles of risk management…would argue for softening the expected path of policy when risks shift to the downside.”

Other problems have cropped up for the Fed, most notably the unpredictable path of U.S. trade negotiations, and signs that global economic growth may be slowing. U.S. economic data has also been choppy, with a weak recent jobs report and signs the manufacturing sector is slowing.

But the shortfall of inflation from the Fed’s 2 percent target has become a persistent problem for the Fed, putting its credibility and the performance of the economy at stake.

While the Fed’s mandates from Congress refers to maintaining “stable prices,” central bankers globally feel that a bit of inflation is healthy. It allows wages and prices to rise steadily, encouraging businesses and households to spend and invest. For the central bank it provides room for them to keep interest rates above zero and, therefore, be able to react to a downturn with interest rates cuts alone.

The threat of inflation drifting downward is twofold.

Waiting too long means more aggressive Fed action could be required. In an era when the benchmark policy rate is already so low, that could mean again hitting the zero lower bound and forcing the politically difficult decision to ramp up “unconventional” policy tools like bond-buying once again.

Brainard also sketched out the threat of a self-reinforcing spiral that could take hold if the Fed does not lift inflation higher, with weakened expectations dragging down actual inflation, and leaving the central bank perennially stuck near zero.

In a sharp broadside against the Fed’s decision last week to hold interest rates steady, Minneapolis Federal Reserve bank president Neel Kashkari said the economy needed shock therapy to push inflation and inflation expectations higher, and convince the public the Fed is serious about its 2 percent inflation goal.

It is a target that has not been consistently met since it was formally adopted in 2012, and Kashkari said he is concerned the public and investors have absorbed the wrong message.

Though he is currently not a voter on the Fed’s rate-setting panel, he called for the Fed to slash rates by half a percentage point now, and commit to not raising them until inflation durably moves to the central bank’s 2 percent target.

The Fed “should take strong action to re-anchor inflation expectations at our 2 percent target and support strong job growth, higher wage growth, and sustained economic expansion,” said Kashkari, who has consistently opposed recent rate hikes.

St. Louis Federal Reserve bank president James Bullard, meanwhile, a current voter on rate policy, explained his dissent at the recent meeting as largely a response to the weakening pace of price increases.

“Inflation measures have declined substantially since the end of last year and are presently running some 40 to 50 basis points below the FOMC’s 2% inflation target,” Bullard said in a prepared statement. “The forces that are keeping inflation below target seem unlikely to be solely transitory…Lowering the target range for the federal funds rate at this time would provide insurance against further declines.”

Graphic: The Fed’s inflation problem, click https://tmsnrt.rs/2Rv6Aij (The story corrects to change reference in sixth paragraph to rate cuts instead of rate increases)

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