Dollar Slides as Inflation Backs Fed’s Lower-Rates Outlook

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The dollar headed for a second weekly decline after a report Thursday showed U.S. inflation is well below Federal Reserve targets, backing central bank plans for gradual interest-rate increases.

The U.S. currency weakened after the Fed cut its longer-term projections for U.S. borrowing costs Wednesday, dimming the allure of dollar-denominated assets. U.S. core inflation slowed in May and the overall consumer price index was unchanged for the past 12 months while the Fed seeks an annual increase approaching 2 percent.

Bloomberg’s Dollar Spot Index, which tracks the U.S. currency against 10 peers, dropped 0.9 percent this week to 1,164.58 this week as of 10:13 a.m. in Tokyo. The dollar has slid 1 percent to $1.1384 per euro and weakened 0.4 percent to 122.88 yen.

The U.S. currency is still the best performer during the past 12 months among currencies tracked by Bloomberg Correlation-Weighted Indexes, gaining 17 percent. In June, it’s fallen about 2 percent.

Source : Bloomberg

Oil Holds Gains Near $60 as U.S. Drilling Slowdown Cuts Supply

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Oil held gains near $60 a barrel on track for a second weekly advance amid increasing signs the slowdown in U.S. drilling is reducing an oversupply.

Futures were little changed in New York and 0.7 percent higher for the week. U.S. drillers have reduced the number of operating oil rigs for a record 27 weeks to the lowest level in almost five years, according to Baker Hughes Inc., and oil stockpiles have shrunk for seven consecutive weeks. Prices rose Thursday as the dollar weakened, making commodities more attractive to investors.

Oil is trading near six-month highs as shrinking U.S. stockpiles counter a boost in output from OPEC nations. Saudi Arabia, Iraq and the United Arab Emirates are pumping more crude as the 12-member group seeks to defend market share against higher-cost producers.

West Texas Intermediate for July delivery was at $60.37 a barrel in electronic trading on the New York Mercantile Exchange, down 8 cents at 10:09 a.m. Sydney time. The contract gained 53 cents to $60.45 on Thursday. Prices have increased about 13 percent this year.

Brent for August settlement fell 16 cents, or 0.3 percent, to $64.10 a barrel on the London-based ICE Futures Europe exchange. It gained 39 cents, or 0.6 percent, to $64.26 on Thursday. The European benchmark crude traded at a premium of $3.37 to WTI for the same month.

Source : Bloomberg

China Stocks Head for Worst Week Since 2008 Amid Margin Concern

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China’s stocks fell, sending the benchmark index toward its steepest weekly loss since 2008, amid concern the government will clamp down on margin trading and valuations are excessive after a world-beating rally over the past year.

The Shanghai Composite Index dropped 1.5 percent to 4,712.15 at 9:33 a.m., extending losses to 8.7 percent this week. The China Securities Regulatory Commission is working on margin-trading risk management rules for securities firms, the 21st Century Business Herald reported, without citing anyone.

Source : Bloomberg

Shanghai Stocks Head for Worst Week Since 2009 as Futures Drop

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China’s stock-index futures fell amid concern the government will clamp down on margin trading to avoid bubble risks and valuations have outstripped earnings growth.

Futures on the CSI 300 Index expiring in July, the most active contract, slid 1.1 percent to 4,925 as of 9:18 a.m. local time. The China Securities Regulatory Commission is working on margin-trading risk management rules for securities firms, the 21st Century Business Herald reported, without citing anyone.

The Shanghai Composite Index dropped 3.7 percent to 4,785.36 on Thursday, as initial public offerings drained cash from the market and investors speculated recent gains have gone too far. It has fallen 7.4 percent this week, heading for the biggest weekly loss since 2009.

Source : Bloomberg

Asian Stocks Advance as Investors Await Bank of Japan Decision

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Asian stocks rose for a second day, following gains in U.S. shares, as investors awaited a Bank of Japan policy decision. Energy shares led the advance.

The MSCI Asia Pacific Index climbed 0.3 percent to 146.91 as of 9:01 a.m. in Tokyo, paring this week’s slide to 0.8 percent. The Standard & Poor’s 500 Index jumped 1 percent on Thursday in New York and the Nasdaq Composite Index closed at a record high after the Federal Reserve signaled it will continue to support the economy even as growth picks up.

Japan’s Topix index added 0.9 percent. The BOJ ends a two-day policy meeting on Friday. More economists now see the BOJ expanding stimulus later, according to a Bloomberg survey June 8-15, after Governor Haruhiko Kuroda said the yen’s exchange rate adjusted for inflation and trade with other nations has returned to levels before the collapse of Lehman Brothers Holdings in 2008.

Source : Bloomberg