MARKET UPDATE

Asian Currencies Muted as USD Retains Strength

Most Asian currencies kept to a tight range on Thursday as the U.S. dollar remained underpinned by expectations of a hawkish Fed, while the Taiwan dollar fell the most amid continued concerns over a clash with China.

The Taiwan dollar lost about 0.2% and stayed around two-year lows of 30 to the dollar. An escalation in tensions with China, amid U.S. House of Representatives Speaker Nancy Pelosi’s Taipei visit, has battered the currency this week.

Reports now suggest that China is carrying out cyber-attacks on the Taiwan Defence Ministry, and allegedly flying drones over some outlying islands. China had largely opposed Pelosi’s visit, claiming that Taiwan is part of its territory.

 

Dollar Hands Back Some Gains; Pound Edges Higher Ahead of BOE Meeting

The U.S. dollar handed back some of its earlier gains in European trade Thursday, while the pound was flat ahead of the latest Bank of England rate decision.

Helping the dollar this week has been a reassessment of the likelihood of the Federal Reserve to maintain its aggressive monetary tightening stance in the wake of reasonable economic data and hawkish comments from a number of policymakers.

 

German Factory Orders Fell Less Than Feared in June

German factory orders ended the second quarter on a weak note but performed better than expected in a month overshadowed by a growing energy crisis.

Statistics office Destatis said incoming orders fell 0.4% from May, due overwhelmingly to a drop in orders from outside the Eurozone. Big-ticket items, which are often volatile from month to month, fell particularly sharply.

However, that was less than the 0.8% drop expected ahead of time. Excluding big-ticket items, orders rose 0.4%, thanks to increases in demand for consumer and intermediate goods.

 

Oil prices edge up on supply concerns after drop to near 6-month low

Oil prices rose on Thursday as supply concerns triggered a rebound from multi-month lows plumbed in the previous session after U.S. data signalled weak fuel demand.

Brent crude futures rose 10 cents, or 0.1%, at $96.88 a barrel at 0653 GMT, while West Texas Intermediate (WTI) crude futures was last up 21 cents, a 0.2% gain, at $90.87.

Both benchmarks fell to their weakest levels since February in the previous session after U.S. data showed crude and gasoline stockpiles unexpectedly surged last week and as OPEC+ agreed to raise its oil output target by 100,000 barrels per day (bpd), equal to about 0.1% of global oil demand.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, have been previously increasing production but have struggled to meet targets as most members have already exhausted their output potential.

 

 

 

 

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