Most Asian currencies were in a small range, while the dollar weakened against the Japanese yen on Thursday as the Federal Reserve expected to cut interest rates next year, but recovered from earlier losses against the euro in weak trade. Support fell as expectations for a rate cut grew, especially after the Fed’s stance was surprisingly split at its December meeting.
The number of Americans who filed initial claims for unemployment benefits rose by 12,000 last week to 218,000, indicating that the labor market continued to cool during the year and the fourth quarter.
Crude fell 3% as more shipping lines said they were willing to use the Red Sea route, easing concerns about supply disruptions as tensions in the Middle East remain high.
Denmark’s Maersk and Europe’s Maersk will now route almost all container ships flying between Asia and Europe through the Suez Canal and only a handful around Africa, a Reuters group and schedule showed on Thursday. Major shipping lines stopped using Red Sea routes and the Suez Canal earlier this month after Yemen’s Houthi group began targeting ships.
Later, prices fell further, likely as traders focused much of the U.S. Gulf Coast region, where refiners are looking to trim inventories to avoid high year-end inventory taxes, UBS analyst Giovanni Staunovo said.
U.S. crude inventories fell by 7.1 million barrels in the week ended Dec. 22, EIA data showed, while analysts polled by Reuters had expected a decline of 2.7 million barrels. U.S. Gulf Coast crude inventories fell by 11.03 million barrels, the biggest drop since August, the data showed. [EIA/S].
Gold retreated after hitting gains more than three weeks earlier, as gains in the U.S. dollar and Treasuries dampened expectations of interest rate hikes by the U.S. Federal Reserve early next year.
MCX gold futures down 0.37% to 63749. Silver down 0.81% to 76093. Copper was down by 0.62% at 734.70. Crude oil at 6048, down 2.62%. Natural gas up 2.36% at 212.300.
Economic data and events scheduled:
UK
At 12.30pm- Nationwide HPI m/m. Data is foreseen at 0.1% from previous 0.2%.
The above data could have a negative impact on the pound.
Eurozone
At 1.30pm- Spanish Flash CPI y/y. Data is foreseen at 3.2% from previous 3.2%.
Above data could have a neutral impact on the Euro.
U.S.–
At 8.15pm-Chicago PMI. Data is foreseen at 50.1 from previous 55.8. Above data could have a negative impact on the dollar
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