- Greenback stands tall as Fed delivers Interest Rates cut
- Gold loses its shine
- Australia’s jobless figure unexpectedly climbs
- Mixed fortunes for cryptocurrencies as Bitcoin falls & Ethereum rises
The US Dollar stood tall on Thursday after the US Federal Reserve cut rates by 25 basis points. The Greenback touched a seven-week high of 108.47 against the Japanese Yen and stood just below that in Asian morning trade. It also rose on the Swiss Franc, hitting a three-month high, and climbed against other major currencies. Elsewhere, the New Zealand Dollar briefly jumped 0.2% after June-quarter gross domestic product landed higher than expectations, before being swamped by a rising Greenback.
Oil prices edged higher in early Asian trade on Thursday after days of turbulence, with markets soothed by Saudi Arabia's pledge to restore full production by end-September at facilities knocked out in drone and missile attacks last weekend. Brent Crude futures rose 8 cents to $63.68 a barrel by 01:39 GMT while US West Texas Intermediate Crude was up 12 cents to $58.23 a barrel. The steadying of nerves, after a 2% drop on Wednesday and a 14% plunge on Monday, came after Saudi Arabia set out the timeline to full operation and also said it had managed to restore supplies to customers at levels prior to the attacks by drawing from its oil inventories.
Gold futures slipped Wednesday after the Federal Reserve executed a widely anticipated rate cut that boosted the US Dollar and left longs in the yellow metal clueless on immediate direction. US Gold futures for December delivery settled up $2.40, or 0.2%, at $1,515.80 per ounce on the Comex division of the New York Mercantile Exchange, before the Fed announcement. At 3:15 PM ET (19:15 GMT), the contract traded at $1,497.15 an ounce, down $16.25, or 1.1%. Spot Gold, reflective of trades in bullion, shed $12.30, or 0.8%, to stand at $1,489.09. Gold’s weakening after the rate-cut announcement correlated with the strength of the US Dollar index, which was up 0.4% at 98.21.
The trade war is taking its toll on Apple Inc, a new survey of Chinese consumer attitudes shows. The company tumbled to No. 24 in an annual report on China’s top brands, falling from No. 11 a year ago. In 2017, before the trade war started, Apple was fifth in this ranking. Meanwhile, Apple’s biggest local rival, Huawei Technologies Co, climbed two spots and came in second, behind only Chinese payment service Alipay.
Asian shares turned lower on Thursday after the US Federal Reserve cut interest rates as expected but signalled a higher bar to further policy easings. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.36%. Hong Kong shares shed 0.96%, but Japan's Nikkei rose 1.01%. Meanwhile, Treasury yields rose broadly and the curve flattened as Fed Chairman Jerome Powell took a cautious approach to any further reductions in borrowing costs, while division among central bankers has increased uncertainty over how much further rates might fall.
Australia’s jobless rate unexpectedly climbed in August as the labour force swelled to a fresh record, signalling additional labour-market slack that sets the scene for further easing by the central bank. Unemployment climbed to 5.3%, the highest level in a year, and above the 5.2% forecast by economists, data from the statistics bureau showed in Sydney Thursday. The 34,700 increase in jobs for the month was swamped by the seemingly inexorable rise in the participation rate to 66.2%.
The result is the wrong direction for a Reserve Bank trying to push down unemployment and revive inflation that’s lain dormant for almost half a decade. Governor Philip Lowe has lowered the cash rate to 1% to support economic growth and is urging the government to add stimulus, an effort frustrated by a focus on returning the books to the black.
Argentina's Senate unanimously approved a law on Wednesday that will increase state funds dedicated to fighting hunger and improving nutrition as the country grapples with stifling inflation and increased poverty. The measure establishes a "food emergency" and allocates a 50% boost in the current budget for national public food and nutrition policies, according to the government. The lower house had voted overwhelmingly in favour of the measure on September 12. It was proposed by opposition lawmakers, including those from the party of Alberto Fernandez, the Peronist opposition candidate and front-runner in the October 27 presidential election.
The top US consumer watchdog will keep consumer complaints against financial firms public despite pressure from the companies, but the agency said on Wednesday it will make changes to the way those complaints are filed. The decision to retain the Consumer Financial Protection Bureau's public complaints database follows a review initiated in 2018 when Mick Mulvaney, who is now President Donald Trump's acting chief of staff, was the agency's interim director.
Japanese Economy Minister Yasutoshi Nishimura said on Thursday that the government was prepared to help small businesses and farms depending on the outcome of trade talks with the United States, expected to be finalised and signed next week. "We're working on the negotiations now," Nishimura told reporters in a briefing. "If necessary, we will make sure to support mid-size and small companies and farms," depending on what is agreed with the United States, he added.
The Bank of Japan left its monetary stimulus unchanged and called for a re-examination of prices and the economy at its October meeting, choosing to sit tight for now just hours after the Federal Reserve cut interest rates again. The BOJ kept its interest rates and asset purchases at existing levels, it said in a statement Thursday, a result forecast by about three quarters of economists surveyed by Bloomberg. The BOJ will review the economy and inflation at the next gathering starting Oct. 30, it said. A previous comprehensive assessment in 2016 led to the creation of the current policy framework, yield curve control. The central bank said Thursday that it needed to pay closer attention to the risk of losing momentum toward its 2% inflation target.
Bitcoin was last at $10,173.9 on the Investing.com Index, down 0.16% on the day. Ethereum was trading at $213.63 on the Investing.com Index, a gain of 5.93%. Meanwhile, Germany delivered a blow against Facebook’s planned cryptocurrency, expanding Europe’s opposition to the social network’s financial ambitions. While the development of blockchain technology holds great potential, it should not be used to develop private forms of money, the government in Berlin said after the cabinet approved its new blockchain strategy. “A core element of state sovereignty is the issuance of a currency, we will not allow private companies to do it,” Finance Minister Olaf Scholz said in an emailed statement following the decision. The criticism from Germany, Europe’s biggest economy, echoes France’s view and scepticism from Washington. Facebook has launched a public-relations offensive that has sought to put policy makers at ease.