Markets & Finance News

* Finance minister says country committed to reforms (Recasts, adds president comment, context)

U.S. President Donald Trump sharply criticized Federal Reserve Chairman Jerome Powell on Friday and said he wouldn't try to stop the chief U.S. central banker if he offered to resign.

U.S. President Donald Trump said on Friday he would not attempt to stop Federal Reserve Chairman Jerome Powell if he offered his resignation.

* U.S. two-year/10-year yield curve inverts (Updates after U.S. market close with new Trump tweets)

Brazil's stocks and currency slumped to multi-month lows on Friday , as a further escalation in trade tensions between the United States and China slammed investor confidence and asset prices around the world.

President Donald Trump said on Friday the United States would subject Chinese imports to an additional 5% tariff in response to what he called a politically motivated move by China to impose tariffs on $75 billion worth of U.S. exports. "Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer," Trump said on Twitter. "As President, I can no longer allow this to happen!"

* U.S. two-year/10-year yield curve inverts (Updates with U.S. market close)

Speculators' net long dollar position fell to its lowest in more than a year, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $13.327 billion in the week ended Aug. 20, compared with $16.7 billion in the previous week. This week's net long dollar position was the smallest since early July 2018, falling for a third straight week. In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the greenback posted a net long position of $10.9 billion in the week ended Aug. 20, compared with $12.31 billion the previous week. The dollar was pressured all week by the continued slide in U.S. Treasury yields and the subsequent inversion in the yield curve, a scenario some analysts believe presages a recession. So far this month, the dollar has weakened by 0.8% against a basket of six major currencies. The dollar was further pummeled on Friday after a series of tweets from President Donald Trump that further escalated trade tensions between the United States and China. Philip Marey, senior U.S. strategist, at Rabobank said by increasing friction with China, Trump will get what he wants and that is: force the Fed to cut interest rates. "There is now a strong feedback loop between trade policy and monetary policy that will force the FOMC to make more insurance cuts in the coming months, most likely in September and October," said Marey. Japanese Yen (Contracts of 12,500,000 yen) $-3.666 billion 20 Aug 2019 Prior week week Long 49,984 51,764 Short 18,830 27,022 Net 31,154 24,742 EURO (Contracts of 125,000 euros) $5.269 billion 20 Aug 2019 Prior week week Long 168,455 167,214 Short 206,432 213,863 Net -37,977 -46,649 POUND STERLING (Contracts of 62,500 pounds sterling) $7.028 billion 20 Aug 2019 Prior week week Long 33,405 33,405 Short 125,823 129,225 Net -92,418 -95,820 SWISS FRANC (Contracts of 125,000 Swiss francs) $1.421 billion 20 Aug 2019 Prior week week Long 7,925 7,760 Short 19,042 20,712 Net -11,117 -12,952 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $-0.979 billion 20 Aug 2019 Prior week week Long 47,368 50,065 Short 34,331 35,865 Net 13,037 14,200 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $4.254 billion 20 Aug 2019 Prior week week Long 32,358 36,304 Short 95,139 99,216 Net -62,781 -62,912 MEXICAN PESO (Contracts of 500,000 pesos) $-2.792 billion 20 Aug 2019 Prior week week Long 147,542 152,707 Short 37,183 35,145 Net 110,359 117,562 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) $1.171 billion 20 Aug 2019 Prior week week Long 21,073 20,500 Short 39,333 33,947 Net -18,260 -13,447 (Reporting by Gertrude Chavez-Dreyfuss; editing by Jonathan Oatis and Cynthia Osterman)

The dollar stumbled on Friday after President Donald Trump ordered U.S. companies to start looking for an alternative to China as Beijing imposed more tariffs on American goods, further exacerbating a prolonged trade war between the world's two largest economies. That triggered mass selling in the dollar, which fell from a three-week high against the euro and to one-week troughs versus the Japanese yen and Swiss franc. Benchmark U.S. 10-year Treasury yields also fell sharply. The dollar, however, strengthened against the Chinese yuan in the offshore market, hitting a two-week high. "Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA," Trump wrote on Twitter. Trump cannot legally compel U.S. companies to abandon China immediately. He gave no detail on how he might proceed with any such order. His tweet followed China's announcement on Friday of retaliatory tariffs on about $75 billion worth of U.S. goods, putting as much as an extra 10% on top of existing rates. "All of this adds to uncertainty in terms of geopolitics," said Fran Rodilosso, head of fixed income portfolio management at VanEck in New York. "Obviously, the uncertainty is with regard to global growth and that has been everyone's chief concern." Trump's comments overshadowed a speech by Federal Reserve Chair Jerome Powell, who did not announce a major stimulus measure to ease a worsening global economic outlook, but set the stage for further interest rate cuts. Powell said the U.S. economy was in a "favorable place" and the Fed would "act as appropriate" to keep the economic expansion on track. "Fed Chairman Powell's speech at Jackson Hole suggests that he is leaning toward a September rate cut, but he did not lay out a reaction function regarding the Fed's rate path beyond September," said Philip Marey, senior U.S. strategist, at Rabobank. The Fed's annual economic symposium in Jackson Hole, Wyoming, ends on Saturday. Trump, however, was enraged by Powell's speech, saying he was not sure who was the bigger enemy, the U.S. central bank chief or Chinese leader Xi Jinping. "As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly," Trump wrote on Twitter. "By escalating the trade war, President Trump will get what he wants from the Fed: lower rates," said Rabobank's Marey. In afternoon trading, the euro rose 0.6% to $1.1148, after touching a three-week low of $1.1052. An index that tracks the dollar against six major currencies was down 0.6% at 97.624. The dollar fell to a one-week low against the yen and was last down 1.1% at 105.32. It earlier hit a one-week high of 106.73 yen. Against the Chinese yuan, the dollar was up 0.6% at 7.1314 yuan, after touching a two-week peak of 7.1383. ======================================================== Currency bid prices at 3:57PM (1957 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1148 $1.1078 +0.63% -2.80% +1.1153 +1.1052 Dollar/Yen JPY= 105.3000 106.4200 -1.05% -4.50% +106.7300 +105.2600 Euro/Yen EURJPY= 117.38 117.94 -0.47% -7.00% +118.1500 +117.2900 Dollar/Swiss CHF= 0.9744 0.9835 -0.93% -0.71% +0.9877 +0.9736 Sterling/Dollar GBP= 1.2285 1.2250 +0.29% -3.70% +1.2293 +1.2196 Dollar/Canadian CAD= 1.3288 1.3302 -0.11% -2.56% +1.3338 +1.3277 Australian/Doll AUD= 0.6751 0.6756 -0.07% -4.23% +0.6777 +0.6737 ar Euro/Swiss EURCHF= 1.0862 1.0896 -0.31% -3.48% +1.0928 +1.0856 Euro/Sterling EURGBP= 0.9072 0.9041 +0.34% +0.98% +0.9094 +0.9038 NZ NZD= 0.6391 0.6363 +0.44% -4.85% +0.6409 +0.6366 Dollar/Dollar Dollar/Norway NOK= 8.9567 8.9776 -0.23% +3.68% +9.0137 +8.9333 Euro/Norway EURNOK= 9.9860 9.9449 +0.41% +0.81% +9.9978 +9.9225 Dollar/Sweden SEK= 9.6126 9.6767 -0.06% +7.24% +9.6983 +9.6077 Euro/Sweden EURSEK= 10.7154 10.7215 -0.06% +4.40% +10.7335 +10.6910 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan Oatis, Bernadette Baum and Richard Chang)

Speculators' net long dollar position fell to its lowest level in more than a year, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.