China Factories Are Exporting Lower Prices Around the World

(Bloomberg) — Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.

Chinese factories are again threatening to drag down prices around the world as the cost of their goods decline by the most since 2016.

In a fresh challenge to the ability of global central banks to revive inflation, China’s slowest growth in almost three decades and cheaper energy costs have left manufacturing prices declining since July.

While cheaper goods may be a boon to foreign consumers as Christmas nears, the overall effect is a potential spiral of falling prices worldwide as companies everywhere are forced to compete with Chinese rivals to protect profits. That would add further tension to the U.S.-China trade war.

“Inflation is increasingly driven by global factors, and in particular, by waves of disinflation emanating from China,” according to Stephen Jen and Joana Freire at Eurizon SLJ Capital. “This is related to China exporting its overhang of capacity” which has been exposed by weak domestic demand, trade tensions with the U.S., and lack of economic stimulus.

They expect the recent worsening of the producer price index to weigh on inflation rates in the U.S. and Europe, similar to what happened in 2014-16. Producer prices in Germany, Japan, South Korea and the U.S. are already negative.

Data released on Saturday underscored the problem, with Chinese producer prices dropping for a fourth month in October. Input costs and energy prices have fallen since June, reducing costs for producers. However, those savings haven’t boost companies’ margins as demand isn’t strong and there’s plenty of excess capacity, so manufacturers have also cut asking prices.

What Bloomberg’s Economists Say

“Deepening factory deflation highlights sluggish demand, and depresses profits for industrial firms — limiting capacity to hire workers and invest in facilities.”

Weakening commodity prices are still the main cause for the deflation, and this is weighing on prices of related downstream industries, such as chemical materials and chemical fabrics.

David Qu, Economist

See here for the full note

A key problem is that while prices deflate, loans don’t, making it harder still for China’s indebted industrial sector to make ends meet. Chinese private companies are already defaulting on their bonds at twice the rate this year compared with 2018, and the government is worried about the health of the banking sector.

“The U.S.-China trade war is paralyzing global capex spending and delivering a massive deflationary shock,” according to Chua Hak Bin at Maybank Kim Eng Research Pte. in Singapore.

U.S. tariffs are diverting China’s excess capacity and supply to third countries, and more companies and nations are likely to feel the deflationary pressures, according to Chua.

The deflation risk reflects China’s heftier role in the world economy and how for many industries it is a price setter. It made up 12% of total global trade in 2018, the largest single country. Chinese price shocks accounted for about 6% of average inflation globally, according to a 2016 analysis by Bundesbank economists.

Similar to what happened in 2014-2016, a flow of cheaper goods from China will make it harder for central banks elsewhere to generate sustained inflation. Consumer prices in Japan, Germany and the U.S. are already below their inflation targets of around 2% a year, and further declines in the price of imports and manufactures will only make it harder to reach those goals.

China is the biggest source of imports for the U.S. and Japan, and the second-biggest for Germany, after the Netherlands.

The effect of the slide in the price of exported Chinese goods is already appearing in the data of some of those trading partners, with the prices of Chinese machinery, metals, cloth, and chemicals imported by Japan all dropping, and the price of U.S. imports also in decline. Germany and South Korea don’t provide a breakdown on the price of imports from China.

In addition to falling PPI, discounts by Chinese companies to compensate for tariffs may be having an effect on the price of goods sent to the U.S., and some of the decline in export prices is likely due to the yuan weakening against the dollar, making Chinese goods cheaper for companies in many countries.

Still, China’s producer deflation is nowhere near as bad as the low of -5.9% seen in 2015, and much of the current drop is due to cheaper energy and commodity prices, according to Michael Shaoul of Marketfield Asset Management. If energy prices stay stable, China’s factory prices may become neutral, he said.

Economists expect producer prices to bottom out in the fourth quarter before recovering slightly.

As for consumer prices in China, the overall measure is actually rising as soaring pork prices push up foods costs. That’s caused global bacon prices to increase and is pushing up the cost of other meats.

“China’s PPI deflation is a result of both weak commodity prices and weak domestic demand,” according to Chi Lo, Greater China economist at BNP Paribas (PA:) Asset Management. “The China factor is disinflationary at this point but not deflationary.”

(Updates with comment from Bloomberg economist.)

Let’s block ads! (Why?)

Economy News

Djokovic has world number one Nadal in his sights at London finale

Djokovic has world number one Nadal in his sights at London finale Djokovic has world number one Nadal in his sights at London finale

By Martyn Herman

LONDON (Reuters) – If Novak Djokovic is to claim the year-end number ranking for a record-equaling sixth time he will have to do it the hard way at the ATP Finals next week in London.

The Serb was knocked off top spot by Rafael Nadal on Monday despite winning the Paris Masters last week and will need a strong finish alongside the River Thames to snatch it back.

Only Pete Sampras has finished a year on top six times and Djokovic’s hopes of emulating the American are not in his own hands with Nadal leading by 640 points heading to the climax.

Nadal, 33, is bidding to become the ATP’s oldest year-end number but with 200 points awarded for round-robin wins, 400 for a semi-final win and 500 for winning the final the door is still ajar for Djokovic to deny him.

Spaniard Nadal has often struggled physically in London and pulled out of his Paris Masters semi-final against Denis Shapovalov last week citing an abdominal issue when victory would have put him virtually out of reach.

He intends to play in London having been drawn in a round-robin group alongside 2018 ATP Finals champion Alexander Zverev and debutants Daniil Medvedev and Stefanos Tsitsipas.

If Nadal fails to win a round-robin match, Djokovic would still need to win two group matches and reach the final to dislodge him. Djokovic will also finish the year as number one by winning the title, providing Nadal does not reach the semis.

Djokovic faces a tough group though, with six-time champion Roger Federer, French Open runner-up Dominic Thiem and Italian Matteo Berrettini, the third newcomer in this year’s event, who he will play in Sunday’s opening singles.

“It’s an extremely difficult task considering who my opponents are going to be,” Australian Open and Wimbledon champion Djokovic said.

“As a consequence, if I manage to get the year-end number one, that would be fantastic. It is a motivation and a goal every day.”

Federer, ranked third, will be a particularly dangerous obstacle for Djokovic even if he has not added to his ATP Finals title haul since winning in 2011.

The Swiss, who has a record 57 match wins at the event, bowed out to Zverev in the semi-finals last year but continues to defy the passing years at the age of 38.

Last month he claimed the Swiss indoor title without dropping a set. It was his fourth title in 2019, during which he lost an epic Wimbledon final to Djokovic having held match points.

The penultimate ATP Finals in London, before it moves to Turin, has a fresh look this year.

Russian counter-puncher Medvedev has enjoyed an incredible breakthrough year and of the three debutants he looks the most likely to challenge for the title.

He leads the charts in terms of match wins (59) and finals reached (9) and against Nadal in a sensational U.S. Open final proved he has the personality to go toe-to-toe with the giants.

For the fourth successive year there are eight different nations represented in the singles while half of the singles field are aged 23 or under. The new wave is arriving, but Djokovic still has unfinished business.

Colombian duo Juan Sebastian Cabal and Robert Farah will lead the doubles event having already clinched the year-end number one ranking and will be seeking a London double after winning this year’s Wimbledon crown.

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.

Let’s block ads! (Why?)

Sports and General News

Simone Biles captures all-time medal record at world championships

Simone Biles scores 23rd world medal

Simone Biles became the gymnast with the most medals ever earned at the world championships with her victory in the balance beam competition on Sunday, continuing her record-breaking week at the World Gymnastics Championship in Stuttgart, Germany.

Biles entered the competition Saturday with 22 medals, just one short of matching the record, with four events left. The record was held by Vitaly Scherbo of Belarus, who earned 23 medals in the 1990s. 

Sherbo earned his medals over the course of six years. Biles has done it in just five. Men also have the chance to earn medals in six apparatus finals, whereas women only compete in four. 

Trending News

Biles earned gold on vault — her favorite — Saturday morning to bring her medal count to 23. Shortly after, she competed on uneven bars but placed fifth, out of medal contention. She had the highest qualifying scores in both balance beam and floor exercise leading into Sunday.

Biles finally earned her 24th medal on the balance beam Sunday morning, delivering a nearly flawless performance with a score of 15.066.

Last Saturday, Biles landed two new skills that had never been performed in competition. Both are expected to be named after her, bringing her total number of signature moves to four. 

On Tuesday, Biles won a record 21st medal, leading her team to their fifth consecutive world team championship in what is likely Biles’ last world championship. 

On Thursday, Biles gymnast captured her fifth all-around world title. She scored 58.999 points, beating China’s Tang Xijing by a whopping 2.1 points — her largest-ever margin of victory at the world championships.

“Every year it feels better and better just because we’re adding to the legacy,” Biles said. “I feel like I never think of records. I just go out there and do what I came to do, which is compete for the country.”

Let’s block ads! (Why?)

World – CBSNews.com

5.6 pound avocado in Hawaii wins Guinness World Records title

A 5.6-pound Hawaiian avocado has earned the Guinness World Records title for the world’s heaviest avocado. Now that’s a lot of guacamole. 

The Pokini family, who live on the island of Maui, received the certificate from Guinness this week, according to The Maui News. Guinness officials said the average avocado weighs just 6 ounces — a fraction of the size of the new world record holder. 

“It was just for fun,” Juliane Pokini said. “We are showing the world that Hawaii produces record-setting avocados.”

Trending News

Mark Pokini planted his family’s avocado tree when his son was born more than 10 years ago. The tree started as a seed from his brother-in-law’s 50-year-old tree on Oahu, but has grown to be 20 feet tall, he said. 

2226983.jpg
The Pokini family poses with their giant avocado.  Guinness World Records

Mark and Juliane Pokini and their son Loihi knew they had something special when they saw the size of their avocados. They applied back in December for the world record, going through a rigorous verification process before receiving the title. 

This is the family’s second attempt at claiming the title for world’s heaviest avocado. Unfortunately, their first failed to meet all of the requirements, which include input from a certified horticulturist, witness testimonials, weighing using a state-certified scale, photographs and video footage.

This time around, the family was ready. They gathered a team of people and the proper tools as the avocado grew in size, documenting it over time. 

They did not water or fertilize the tree, instead opting to “kind of just leave it alone,” Juliane said.

The wait was worth it. According to the family, it made enough guacamole to feed all of their family and friends. 

“We were excited,” Juliane Pokini said. “But at the same time, we were like, finally. It was such a long wait.”

Let’s block ads! (Why?)

U.S. – CBSNews.com

In swipe at Trump, China tells U.N. tariffs could plunge world into recession

© Reuters. Chinese Foreign Minister Wang Yi addresses the 74th session of the United Nations General Assembly at U.N. headquarters in New York © Reuters. Chinese Foreign Minister Wang Yi addresses the 74th session of the United Nations General Assembly at U.N. headquarters in New York

By David Lawder and David Brunnstrom

UNITED NATIONS (Reuters) – The Chinese government’s top diplomat said on Friday that tariffs and trade disputes could plunge the world into recession and Beijing was committed to resolving them in a “calm, rational and cooperative manner.”

In a blunt speech to the annual United Nations General Assembly, State Councilor and Foreign Minister Wang Yi said: “Erecting walls will not resolve global challenges, and blaming others for one’s own problems does not work. The lessons of the Great Depression should not be forgotten.”

Taking a clear swipe at U.S. President Donald Trump, who started a damaging trade war on China nearly 15 months ago, Wang added, without naming the U.S. leader:

“Tariffs and provocation of trade disputes, which upset global industrial and supply chains, serve to undermine the multilateral trade regime and global economic and trade order.

“They may even plunge the world into recession.”

In successive rounds of tit-for-tat tariffs, the United States and China have levied punitive duties on hundreds of billions of dollars of each other’s goods, roiling financial markets and threatening global growth.

A new round of high-level talks between the world’s two largest economies is expected in Washington in the first half of October.

Wang’s remarks, unusually pointed for a Chinese diplomat, coincided with word that the Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from U.S. stock exchanges.

Sources told Reuters on Friday that the move would be part of a broader effort to limit U.S. investments into Chinese companies, in part because of growing security concerns about their activities.

News of the potential restrictions on portfolio investments restrictions sent U.S. stocks and oil prices lower on Friday on fears that U.S.-China trade tensions would again escalate. An increase in U.S. tariffs to 30% from 25% on $ 250 billion in Chinese imports is scheduled for Oct. 15 if no progress is made before then.

U.S. and Chinese rhetoric on trade this week had seesawed between harsher and more conciliatory, with Trump issuing a sharp rebuke of China’s trade practices and state-led development model in his speech before the General Assembly on Tuesday, adding that he would not accept a “bad deal.”

On the same day, Wang warned the United States not to interfere with China’s sovereignty. But on Thursday he said China was willing to consider increased purchases of farm products and predicted that talks would lead to a resolution if both sides took more steps to improve goodwill.

Trump said on Wednesday a trade deal with China could come sooner than people think, and praised the Chinese purchases.

NORTH KOREA

At the United Nations, Wang also took aim at Trump’s policy on North Korea, in which groundbreaking talks between Pyongyang and Washington have stalled, largely over the U.S. refusal to ease punishing sanctions.

Wang said it was necessary for the United Nations to consider invoking the rollback terms of North Korea-related sanctions resolutions “in the light of new developments” on the Korean Peninsula “to bolster the political settlement of the Peninsula issue.”

He said “the realistic and viable way forward” was to promote “parallel progress in denuclearization and the establishment of a peace mechanism” to gradually build trust “through phased and synchronized actions.”

Wang criticized the U.S. withdrawal this year from a treaty governing intermediate range nuclear missiles, and said China was against the deployment of such missiles in the Asia-Pacific region.

He said China would continue to take an active role in the international arms control process and added that it has initiated domestic legal procedures to join the Arms Trade Treaty.

Trump has said he intends to revoke the U.S. signature to the treaty, which regulates the $ 70 billion global cross-border trade in conventional arms and seeks to keep weapons out of the hands of human rights abusers.

So far, 104 countries have joined the pact, which the General Assembly approved in 2013.

Wang reiterated comments made earlier in the week, stressing China’s commitment to the principle of non-interference in the internal affairs of another country, an apparent reference to Beijing’s displeasure at criticism of its handling of protests in Hong Kong.

“On the international stage, we speak for justice and oppose hegemonism or bullying,” Wang said.

Shortly before Wang’s speech, China and Kiribati formally resumed diplomatic ties at a ceremony he presided over at the Chinese Permanent Mission to the United Nations in New York.

The move followed the Pacific island state’s decision to ditch relations with Taiwan, which the United States supports with arms supplies and which Beijing considers a renegade province.

“I do believe that there is much to learn and gain from the People’s Republic of China, and the re-establishment of our diplomatic relations is just the beginning,” Kiribati’s President Taneti Maamau said at the event.

The Solomon Islands and Kiribati are the latest countries to switch relations to China, leaving self-ruled Taiwan with formal ties to only 15 countries.

Let’s block ads! (Why?)

Forex News

Everyone is on the wrong side of the world population trade

The great problem of the 21st century isn’t too many babies, it’s too few

We’ve been programmed for hundreds of years to worry about overpopulation. But like all trades, once it gets too crowded, it reverses.

That’s what’s slowly happening in global population. It continues to rise because of high birth rates in the poorest countries in the world but it’s turning and developed countries are leading the way.

Look at the chart this week in the FT. It shows the collapse of South Korea’s birth rate. It’s fallen almost 25% in four years and is now below 1. That means that unless the trend reverses, the population of the country will be halved in a lifetime and will begin to decline as soon as 2028.

South Korea fertility

In the US, the rate is 1.77, in Japan it’s 1.43.

The world leader is Niger at 7.2 with half the country now under the age of 15. That’s followed by Somalia at 6.1 but if falls off quickly from there and is inversely correlated to wealth. The median country is Tunisia at 2.1 which is the replacement rate. That means half the countries in the world will have negative population growth soon excluding immigration.

Even the big population countries — China and India — are no longer tailwinds. India is at 2.3 and China is down to 1.6 despite the end of the one-child policy, a telling trend.

It’s not just richer countries where the birth rate is falling. Puerto Rico is at just 1.1, Poland and Ukraine both at 1.3 and Brazil at 1.7.

The changes in these countries have been shockingly quick. In 1970 Brazil was at 5. Mexico is at 2.2 now compared to 6.8 in 1970.

Governments are beginning to take notice. There is increasing pressure to improve childcare and benefits but there has been a cultural shift in many places against having children. I believe that governments will be paying people significant sums to have children within a decade.

Italy is particularly rough shape due to years of a low birth rate. A draft budget from the current government planned to offer state-held agricultural land rent-free for 20 years to anyone who had a third child. They were also offered zero-interest loans to buy a home.

ForexLive

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

Fortnite: UK player finishes second in e-sports World Cup

Media playback is unsupported on your device

A British teenager has won nearly a million pounds after coming second alongside his teammate in the Fortnite World Cup finals.

Jaden Ashman, from Essex will split $ 2.25m (£1.8m) with his Dutch partner.

The 15-year-old, competing under the name Wolfiez, told the BBC he was “stunned” to have finished so high.

Popular online shooter game Fortnite has 250 million users worldwide, and the event’s prize pool of $ 30m is the biggest ever at an esports event.

Jaden and his team-mate Dave Jong (Rojo) came second in the duos event.

Media playback is unsupported on your device

Norwegian Emil Bergquist Pedersen and Austrian David W – Nyhrox and Aqua – took first place, winning by 51 points to Ashman and Jong’s 47.

The singles final takes place on Sunday.

Jaden has played the game since it came out around two years ago, but unlike many of the finalists, he is relatively unknown with only a few thousand followers and fans on gaming social media.

His mother, Lisa Dallman, said she and her son used to have rows because his grades suffered at school.

She said she once threw out an Xbox after an argument – but now accepts Jaden’s career choice as a professional esports player.

Media playback is unsupported on your device

The Fortnite finals conclude on Sunday with 100 players battling on giant computer screens in the Arthur Ashe Stadium in New York.

Forty million players attempted to qualify over 10 weeks of online competition.

The winner will take home $ 3m and become the first Fortnite World Champion.

With $ 30m to be awarded in total, the prize pool will be the biggest given away at an esports event so far – until the annual Dota 2 tournament in August.

More than 30 nations are represented with 70 players coming from the US, 14 from France and 11 from the UK.

Fortnite is arguably the world’s most popular game and involves 100 players being dropped onto an island where they have to find weapons, build structures and eliminate each other until one player comes out on top.

Let’s block ads! (Why?)

BBC News – Technology

Tennis: Anderson, Isner to lead Team World in Laver Cup

(Reuters) – World number eight Kevin Anderson will lead John McEnroe’s Team World at the Laver Cup in Geneva in September, with John Isner, Milos Raonic and Denis Shapovalov also named to take on Team Europe.

The Laver Cup, a three-day team event between Europe and the rest of the world, became an official part of the ATP Tour in May this year following its runaway success in its first two editions in Prague and Chicago.

The event, named after Australian great Rod Laver, who won 11 Grand Slams between 1960 and 1969, drew sellout crowds last year as a number of top-ranked players such as Roger Federer and Novak Djokovic took part with the Europeans winning 13-8.

McEnroe, a seven-times Grand Slam singles champion, is the captain of Team World while Team Europe are led by his former arch-rival and 11-times Grand Slam champion Bjorn Borg.

“Kevin and John were key to Team World’s near victory in 2018,” McEnroe said in a statement. “And with Milos we add a big server who has beaten everyone on Team Europe more than once.

“We know Team Europe is incredibly strong but we are not coming to Geneva to lose. We’ve come very close the last couple of years, and the third time could definitely be the charm.”

South African Anderson had a memorable outing at the Laver Cup in Chicago last year, beating Djokovic in the singles and teaming up with American Jack Sock to beat Djokovic and Federer in doubles.

“The Laver Cup is more than just a new event. It honors one of the greatest players of all time, Rod Laver, and the sacrifices he and his whole generation made to give us the opportunities and careers we have today),” Anderson said.

The Laver Cup will run from Sept. 20-22. Team Europe have won both previous editions.

Team Europe: Rafael Nadal, Roger Federer, Dominic Thiem, Alexander Zverev, Fabio Fognini

Team World: Kevin Anderson, John Isner, Milos Raonic and Denis Shapovalov

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.

Let’s block ads! (Why?)

Sports and General News

Women’s World Cup: USA vs. France live updates

Brandi Chastain and Michelle Akers take part in new CTE study

The United States and France face each other in a quarterfinal matchup in the FIFA Women’s World Cup Friday. Ranked No. 4 in the world, France will be the toughest opponent the U.S. team has faced in this tournament. Their match Friday is scheduled for a 9 p.m. kickoff in France, which is 3 p.m. ET.

How to watch USA vs. France

Fox has the Women’s World Cup broadcast rights in the U.S. All English language matches will be broadcast on Fox, FS1 and FS2. Telemundo and Universo will be broadcasting the matches in Spanish. All the channels are available online using fuboTV, where you can sign up for a free trial.

  • Date: Friday, June, 7, 2019
  • Time: 3 p.m. ET
  • What: FIFA Women’s World Cup 2019
  • Teams: United States vs. France
  • Where: Parc des Princes — Paris, France
  • TV channels: Fox (English), Telemundo (Spanish)
  • Online stream: fuboTV (Try for free)

Game preview: USA vs. France

The U.S. women’s team won Group F by defeating Thailand, Chile and Sweden. They went on to defeat Group B runner-up Spain 2-1 in the Round of 16. The match was arguably the U.S. team’s worst performance of the tournament. Both of the U.S. goals came from penalty kicks, while Spain took scored their only goal off a miscue by U.S. goalkeeper Alyssa Naeher.

It was the only goal the United States has allowed in the tournament so far.Like the U.S., France won all three matches to win Group A. In the Round of 16, France faced the Brazil, who came in third place in Group C. Their performance in that match was shaky and needed two overtime periods to beat Brazil, 2-1.

Brazil’s goal was the first scored against France in the tournament. In their second round match vs. Norway, France defender Wendie Renard mistakenly kicked the ball into her own net while trying to clear it away.

2019 Women's World Cup bracket

Tale of the Tape: USA vs. France

France and the U.S. have met 23 times, with the U.S. winning 17 of the matches, drawing three and losing three. Their last World Cup meeting was in the 2011 tournament, which was hosted by Germany. The U.S. won that semi-final meeting 3-1. France finished fourth that year and the U.S. came in second.

The most recent meeting between the U.S. and France was a friendly meeting January 19. France won that match 3-1. The lone U.S. goal was scored by Mallory Pugh in the closing moments of the match.

Let’s block ads! (Why?)

World – CBSNews.com

Forex – Dollar Mixed as World Awaits Trump-Xi Meeting at G20

© Reuters.  © Reuters.

Investing.com — The dollar was quiet in a narrow range against most currencies in early trading in Europe Friday as markets await the outcome of the G20 meeting in Osaka, looking for signs of rapprochement between the U.S. and China.

The key event will be a bilateral meeting between Saturday morning in Japan between the U.S. and Chinese presidents Donald Trump and Xi Jinping, which will give a degree of clarity over whether the trade dispute between the two will be ratcheted up or down over the rest of the year.

The dollar has drifted lower against most currencies this week, with the , and all gaining over 1% against it, reflecting a modest revival in risk appetite on hopes that the next planned round of U.S. tariffs on imports from China will be postponed.

“The extent of USD weakness will ultimately depend on any concrete signals coming out of Osaka this weekend vis-à-vis trade discussions,” said BNY strategist John Vells. “A total collapse of any kind of constructive posture between the two protagonists could see a return to risk selling and upward USD pressure.”

Analysts warn that the yen could also surge again if relations between the world’s two biggest economies are seen to be breaking down.

“What’s come out fresh over the past week as a catalyst to push dollar-yen toward 100 is the geopolitical risk over Iran,” Daisuke Karakama, chief market economist at Mizuho Bank Ltd. in Tokyo, told Bloomberg. “If war breaks out in the worst case, that would typically push the dollar lower.”

The yen was flat at 107.66 to the dollar, having lost over 4% since late April as the U.S.-China trade dispute has heated up.

In Europe, the spotlight will likely fall later on consumer inflation data out of various Eurozone states. Data from and on Thursday gave a mixed picture, although the European Commission’s monthly roundup of business and was overwhelmingly gloomy.

European Central Bank President Mario Draghi has said that further stimulus will be needed if the data fail to improve, a slightly more aggressive stance than the Federal Reserve, which is still waiting to be convinced of the need to ease policy.

By 3:30 AM ET (0730 GMT), the was up 0.1% against the dollar at $ 1.1388, while the was drifting at $ 1.2679, ahead of an updated reading for at 4:30 AM ET (0830 GMT). The pound is still at the mercy of uncertainty over Brexit, with – the frontrunner in the race to become the next Conservative Party leader – still sending mixed signals about the likelihood of a “Hard Brexit” on Oct. 31.

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.

Let’s block ads! (Why?)

Forex News