U.S. Dollar Falls Ahead of Fed; Yen Gains Despite Improved Market Sentiment
The safe-haven yen rose on Monday in Asia even after China’s aggressive monetary easing improved investor sentiment, while the U.S. dollar slipped ahead of Wednesday’s minutes of the Federal Reserve’s December meeting and a speech by Fed Chairman Jerome Powell a day later.
The USD/JPY pair was down 0.4% to 108.15 by 11:13 PM ET (04:13 GMT). Meanwhile, the yuan was little changed against the U.S. dollar after the People’s Bank of China (PBOC) cut the reserve requirement ratio for banks by 1% last Friday as Beijing hoped to stimulate lending after weaker-than-expected PMI data released last week suggested a slowing economy.
The cut will release a net 800 billion yuan ($117 billion) of liquidity, the central bank said in a separate statement, adding that the cut is still a “targeted” easing rather than wide-ranging stimulus.
The People’s Bank of China (PBOC) set the yuan reference rate at 6.8517 vs Friday’s fix of 6.8586.
Meanwhile, the U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.2% to 95.523 as traders tried to determine the Fed’s outlook on monetary policy.
Last month the Fed voted to increase interest rates for the fourth time in 2018 and indicated that two more rate hikes this year are likely. While investors will be carefully scrutinising the minutes, they will probably be dated following remarks by Fed Chairman Jerome Powell last Friday.
Powell pledged that the central bank would be watching how the economy performs this year and will adjust policy accordingly.
“As always, there is no preset path for policy,” Powell said. “And particularly with muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves.
Powell is due to deliver remarks at The Economic Club of Washington on Thursday, and U.S. inflation figures are due out on Friday.
Elsewhere, the AUD/USD pair and the NZD/USD pair both gained 0.3%.
UK factories view border delays as a major Brexit risk
More than three-quarters of British manufacturers say delays at the border after Brexit would be a risk for their business, a survey from an industry body showed on Monday.
Britain is due to leave the European Union on March 29 but what will actually happen on that day remains far from clear — a problem for businesses which routinely import and export goods and materials.
The future of Prime Minister Theresa May’s deal struck with the EU hangs in the balance as a parliamentary vote looms, raising the possibility of Britain leaving the EU without a deal to smooth the economic shock.
Monday’s report from the EEF manufacturing association and insurer AIG showed 76 percent of their members thought delays at the border represented a risk to their business.
“While companies are naturally optimistic by their very nature, the spectre of Brexit is now very front of mind for manufacturers,” EEF chief executive Stephen Phipson said.
“This is bringing with it a whole host of risks from increased exchange rate volatility to rising input costs which right now are very difficult to plan for.”
The survey showed 62 percent of manufacturers were looking to stockpile goods ahead of Brexit – something that has already given a temporary boost to factory activity, according to a business survey last week. [GB/PMIM]
The EEF/AIG survey of 242 companies took place between Nov. 1 and Nov. 29.
Stock Market News
Ex-Nissan chairman Ghosn’s lawyers to give news conference Tuesday
Lawyers of ousted Nissan Motor Co Ltd (7201.T) chairman Carlos Ghosn are scheduled to give a news conference on Tuesday, the Foreign Correspondents’ Club of Japan (FCCJ) said on its website on Monday, their first such public appearance.
The three lawyers, headed by chief lawyer Motonari Otsuru, will speak at the FCCJ hours after Ghosn makes his first public appearance in seven weeks at a Tokyo court after he requested an open hearing to hear the reason for his continued detention.
Ghosn’s arrest has put Japan’s criminal justice system under international scrutiny and sparked criticism for some of its practices, including keeping suspects in detention for long periods and prohibiting defense lawyers from being present during interrogations, which can last eight hours a day.
The lawyers’ news conference will be at 3:00 p.m. local time (0600 GMT), the FCCJ said. Otsuru’s office confirmed to Reuters that the news conference will take place but could not give further details.
Ghosn was arrested on Nov. 19 on allegations of financial misconduct, followed by re-arrests over further allegations. He has already been indicted for under-reporting his income, but local media has said he has denied the allegation.
Last week, the court approved extending his detention to Jan. 11 after he was re-arrested by prosecutors who accuse him of aggravated breach of trust in transferring personal investment losses to Nissan.
Ghosn’s arrest was followed by his removal from roles at Nissan and Mitsubishi Motors Corp (7211.T). The case has rocked the auto industry and strained Nissan’s ties with French partner Renault SA (RENA.PA) where he still remains chairman and chief executive.
Ghosn is being held in the spartan Tokyo Detention Center, a tower-like structure in the eastern part of Tokyo – a place that, with its many rules and restrictions, makes for a stark contrast with his comfortable, globe-trotting lifestyle prior to his arrest.
Apple switches strategy, allows Samsung smart TVs to feature iTunes video content
Owners of Samsung’s newest smart TVs will soon be able to watch Apple iTunes content, in what appears to be a strategic shift for Apple.
Samsung Electronics Co. 005930, +3.47% announced Sunday that its new smart TVs will support Apple Inc.’s AAPL, +4.27% iTunes movies and shows, as well as Apple’s AirPlay 2, beginning this spring. An iTunes Movies and TV app will appear on Samsung 2019-model smart TVs, and 2018 models will get the app through a firmware update, the South Korean tech giant said in a statement. Users will be able to access their iTunes library, and buy and rent movies and TV shows from iTunes.
The AirPlay 2 support will allow iPhone and iPad users to send content from their devices to their Samsung smart TVs.
The iTunes app will be available in more than 100 countries, Samsung said, and the AirPlay functionality will be available in 190 countries.
“We look forward to bringing the iTunes and AirPlay 2 experience to even more customers around the world through Samsung Smart TVs, so iPhone, iPad and Mac users have yet another way to enjoy all their favorite content on the biggest screen in their home,” Eddy Cue, senior vice president of internet software and services at Apple, said in a statement.
The move appears to be a change of strategy for Apple, which has seen its stock plummet over the past quarter over slowing iPhone sales. But a growing amount of Apple’s revenue is now coming from its software and services segment, which includes iTunes.
Aside from its longstanding deal with Microsoft Corp.’s MSFT, +4.65% Windows PCs, it will be the first time Apple has allowed its video content to be available through a third-party device. Samsung’s smart TVs are among the best-selling on the market. For streaming content on TVs, Apple has relied on its Apple TV device, which has reported disappointing sales in recent years — though sales reportedly picked up in late 2018 — lagging behind competitors such as Amazon.com’s AMZN, +5.01% Fire stick and Roku Inc. ROKU, +12.06% devices.
The deal should open up Apple video content to a much wider TV audience — including consumers who don’t own Apple devices — ahead of the rollout of its long-awaited streaming-video service, expected in late 2019.
Apple and Samsung have had a complicated relationship. While they have been bitter rivals as smartphone competitors, including a years-long series of patent lawsuits, Samsung has long provided components, such as screens, for Apple devices.
Back Above $4K: Bitcoin’s Price Hits a Two-Week High
The price of bitcoin, the world’s largest cryptocurrency by market capitalization, jumped 6.5 percent Sunday to rise back above $4,000, its highest point in two weeks.
CoinDesk data shows bitcoin’s (BTC) price spiked $262 on Monday at 17:10 UTC to $4,063, a move accompanied by a large injection of volume.
At press time, bitcoin is up 5.95 percent over the last seven days, regaining losses seen toward the end of December.
Bitcoin’s market capitalization has also risen substantially, up $4 billion on the day to $70.73 billion, its highest point since Dec. 25. The move signals an expansion beyond the yearly low of $3,650 and an opportunity for the bulls to push higher this week, based on current price action and momentum.
Still, bitcoin is just one of many cryptocurrencies enjoying strong upside momentum with litecoin (LTC), NEO (NEO) and Cardano (ADA) leading the top 25, up 12.16, 10.6 and 9.11 percent respectively.
The total market capitalization of all cryptocurrencies is up $6.1 billion from yesterday’s top of $132 billion and is currently sitting just above $138.1 billion CoinMarketCap data shows.
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