Weekly news summary for May 17 to May 23, 2019

Friday, May 17: Yuan Drops after China Strikes Tougher Tone

The offshore yuan hit its lowest in six months against the dollar on Friday, after China struck a tougher tone in its trade war with the US, suggesting that the recent trade discussions would be for nothing if Washington do not change its course of action.

The Chinese currency dropped as low as 6.9491, after a state-run press agency and newspaper of China released an opinion column, stating that the country cannot see the US has any substantial sincerity in pushing forward the talks, accusing the US of ‘tricks’ to manipulate negotiations.

Monday, May 20: Chipmaker Stocks Fall on Huawei US Blacklisting

US and European chipmakers declined sharply on Monday, amid concerns over the possibility of Huawei suppliers putting shipments to the Chinese company on ice due to a US crackdown.

European chipmaker STMicroelectronics slipped 8% to the bottom of the CAC 40, while Infineon lost 4.5% on the DAX 30, and Swiss firm AMS fell  11.5%, whereas a 3% to 5% slump was seen on  US chipmakers Qualcomm, Xilinx, Micron Tech, Broadcom, Skyworks Solutions, and AMD.

Tuesday, May 21: Dollar Nears Two-year High as Sentiment Weakness

The US dollar stood near a two-year high that it reached last month,  as risk sentiment weakens on the US-China trade row, which is feared to grow into a currency war.

The dollar index rose to $97.968 overnight before easing back at $97.917, while the dollar-yuan pair steadied, but the greenback sharply climbed against advanced economy currencies, after the Reserve Bank of Australia suggested a reduction in interest rates for its June policy meeting.

Wednesday, May 22: British Pound Slips; May’s New Brexit Deal Fails

The pound came close to posting a new low on Wednesday, after UK Prime Minister Theresa May’s last opportunity to acquire the parliament’s approval for her European Union Withdrawal Bill turned out unsuccessful.

May’s proposal, which included a long-term alignment with EU regulation on workers’ rights and trade policy, along with a second referendum, received criticism from both ruling Conservative and opposition Labor lawmakers, with Conservative lawmaker Andrew Bridgen stating that May’s got to go.

Thursday, May 23: US Crude Inventory Increase Sends Oil Prices Down

Oil prices plummeted on Thursday, after Energy Information Administration data showed, US crude inventories unexpectedly grew by 4.7 million barrels last week, instead of an estimated loss of almost 600,000 barrels.

US West Texas Intermediate crude futures were down 0.6% to $61.03, while Brent oil futures lost 0.7% to $70.48, although the ongoing tension between the US and Iran, as well as output cuts led by the Organization of the Petroleum Exporting Countries, kept the declines in oil prices in check.