Dollar Up From 13-Month Low Ahead Of Fed Decision

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The U.S. dollar is up from 13-month lows against the other major currencies on Wednesday as investors awaited the result of the Federal Reserve’s latest policy meeting and decision later in the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.09% at 94.00, moving away from Tuesday’s 13-month low of 93.46.

FOMC Statement

The Fed is widely expected to keep policy on hold, but Investors were hoping that the Fed’s rate statement, due later Wednesday, will reveal more about policy plans for the second half of the year, with markets paying close attention to details of when and how the Fed will start reducing its $4.5 trillion balance sheet.

Doubts over the Feds plans for a third rate hike this year have recently weighed on the greenback.

Markets have reduced expectations for a U.S. interest rate increase in the coming months with expectations of another rate hike at less than 50 percent before the end of the year.

“If there is no change in the language of the statement, we can expect a mild dollar rally and there would be a better opportunity for the Fed to communicate its policy expectations at Jackson Hole next month,” said Ulrich Leuchtmann, a currency strategist.

Investors also stayed focused on the investigation into alleged links between U.S. President Donald Trump’s administration and Russia in last year’s election.

On Monday, Jared Kushner, Trump’s son-in-law and a senior White House adviser, told Senate investigators he had met with Russian officials four times last year but said he did not collude with Moscow.

Investors fear the persistent political turmoil will disrupt the Trump administration’s pro-growth economic agenda of tax cuts and infrastructure spending, which helped propel the dollar to 14-year peaks after the November election.

Dollar Against Other Currencies

Euro against the dollar was little changed at 1.1627, off session lows of 1.1613, while the sterling edged up against the greenback 0.09% to 1.3040, erasing earlier losses, after the U.K. Office for National Statistics said gross domestic product rose by 0.3% in the three months to June, from 0.2% growth in the first three months of the year, wherein economists had forecast growth of 0.3%.

On a year-over-year basis the economy expanded by 1.7% from 2.0% in the first quarter, also in line with forecasts.

Moreover, the dollar was little changed against the safe-haven yen at 111.91, while it climbed against the swiss franc 0.60% to trade at 0.9581.Lastly, the Australian dollar remained weak, with the Aussie dollar down 0.23% at 0.7919, while the New Zealand dollar or kiwi added 0.18% to 0.7431.

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Amazon Introduces New Shopping Social Network

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Amazon.com Inc has launched a social feature called Spark, an Instagram-style shoppable feed that appears inside the Amazon app that allows members to showcase and purchase products on its platforms, marking the retail giant’s first clear move into the world of social media.

Amazon’s “Spark”

Spark encourages users to share stories, ideas, photos and videos of products they love, which others can react to with comments and “smiles”- Amazon’s own version of Loke or Favorite button, just like popular social media platforms Instagram and Pinterest.

The new feature publicly launched on Tuesday for use on mobile devices that use Apple’s iOS operating system.

The experience is similar to scrolling through your Instagram feed, except in this case everything is set up so you can click on an image and buy the items in it.

The retailer has been quietly testing Amazon Spark in beta for a few months before today’s launch to consumers in the U.S. The goal with the new program is to shift some of the social activities around products taking place off-site back to Amazon, where product inspiration can translate directly into purchases with a click of a button.

It’s only available to Prime members, who pay $99 a year for free shipping, streaming videos and other perks. An Android version is planned.

“We created Spark to allow customers to discover – and shop – stories and ideas from a community that likes what they like,” said an Amazon spokeswoman.

“When customers first visit Spark, they select at least five interests they’d like to follow and we’ll create a feed of relevant content contributed by others. Customers shop their feed by tapping on product links or photos with the shopping bag icon.”

Amazon has also invited publishers, including paid influencers and bloggers to post on Spark. Their posts are identified with a sponsored hashtag.

Amazon Stock Performance

Shares of Amazon were up 1.45% on Wednesday session, to $1,026.87. It opened at $1,025.00, with a session high of $1,031.59 and a session low of $1,022.50. The stock currently has a market capitalization of $497.82 billion, with a price earnings ratio of 192.40.

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Apple Appoints New Leader In China Amid Sales Downturn

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Apple Inc. announced on Tuesday evening that it has appointed Isabel Ge Mahe, currently Vice President of wireless technologies at the company, as new Vice President and Managing Director of Greater China, taking on a new role as leader of the company’s efforts in China, amid a sales downturn for the iPhone maker in the world’s most populous country.

New China Head

Isabel Ge Mahe, who worked in wireless technology at Apple for over nine years, will coordinate and lead teams across Apple’s China-based team in the newly created role, the tech giant said in a statement.

Apple Chief Executive Officer Tim Cook also grabbed the opportunity of the announcement to emphasize its commitment to the China market.

“Apple is strongly committed to invest and grow in China, and we are thrilled that Isabel will be bringing her experience and leadership to our China team,” Cook said in the statement. “She has dedicated a great deal of her time in recent years to delivering innovation for the benefit of Apple customers in China, and we look forward to making even greater contributions under her leadership.”

Ge Mahe, who was born in Liaoning province, previously led Apple’s wireless technology and software engineering team for nine years. She said she was looking forward to digging out the team’s connections with customers, government and businesses in China to advance innovation and sustainability.

Mahe has worked closely with Apple’s R&D team and carrier partners to develop new China-specific features for iPhone and iPad, including recently announced iOS 11 features.

“I’m honored to have this opportunity to represent Apple in China and work more closely with our incredibly talented team,” said Ge Mahe.

Apple’s China Sales Downturn

Apple sales in China have declined for five consecutive quarters after a 14% drop in the most recent earnings report, as Asian smartphone manufacturers have become more competitive in the region, putting out ever-cheaper, high-performing smartphones.

Apple’s huge successes in China have also left it more vulnerable to new rules that Beijing has set up to push back against foreign companies. Apple said this month that it would cooperate with a local company to build its own data center in the country, in part to satisfy the requirements of a new cybersecurity law. And experts say the law is just the beginning of further restrictions on foreign companies like Apple.

Apple Stock Performance

Apple shares were up 0.35% to $150.08 during its last session. The firm opened at $149.20 with a session high of $150.13 and a session low of $148.67. The stock has a market capitalization of $785.22 billion, a P/E ratio of 17.55, and a dividend yield of 1.68%.

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Dollar Continues To Slump, Sinks To 10-Month Lows

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The U.S. dollar continues to slump as it sank to 10-month lows against the other major currencies on Tuesday, after an attempt to pass healthcare reform collapsed and amid a sell-off ignited by another setback to U.S. President Donald Trump’s agenda and doubts over prospects for another rate hike this year.

Greenback Sinks Against Major Currencies

The U.S. dollar index against a group of six major currencies was 0.64% lower at 94.31, the lowest trough since September 9, 2016.

The dollar was at almost three-week lows, weaker against the yen, with USD/JPY down 0.55% to 112.00, after falling as low as 111.99 overnight.

The euro rose to fresh 14-month highs against the dollar, with EUR/USD advancing 0.86% to 1.1577, after touching overnight highs of 1.1538.

Sterling was lower, with GBP/USD down 0.26% to 1.3022 after data showing that the annual rate of inflation in Britain fell for the first time since October last month.

Healthcare Issue and Rate Hike

The dollar came under renewed selling pressure after a second attempt by Republicans to replace Obamacare collapsed late Monday, bringing a major policy blow to the Trump administration.

Around half of the cuts in healthcare spending were reserved to finance proposed tax cuts. The failure to deliver healthcare reform added to disappointment over the lack of progress on Trump’s economic agenda.

The dollar was already on the defensive side after Friday’s weak U.S. inflation and retail sales data that  added to doubts that the Fed will be able to raise interest rates again this year.

Other Currencies

Elsewhere, the Australian dollar jumped to two-year highs, with AUD/USD,  adding 1.59% to trade at 0.7926, after the minutes from the central bank’s last policy meeting showed it turning more positive on the economic outlook.

The New Zealand dollar was also higher, with NZD/USD rising 0.61% to 0.7364. The kiwi initially turned lower overnight before regaining ground after weak inflation data indicated that the country’s central bank will keep interest rates on hold for longer.

The Canadian dollar hit fresh 14-month highs, with USD/CAD last at 1.2624.

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Qualcomm Faces Daily Fine Threat After Losing In EU Probe

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Qualcomm Inc. faces the threat of being fined daily of 580,000 euros ($665,000) after the U.S. chipmaker a court bid to block a European Union order requiring it to provide information for an antitrust probe into the chip company’s sales tactics, losing an appeal against the penalty in an EU court on Monday.

The U.S. chipmaker, which was charged by the European Commission of using anti-competitive methods to freeze out British phone software maker Icera, asked the Luxembourg-based General Court to suspend the order last month.

EU Probe

Qualcomm can’t keep not responding to regulators’ questions because it didn’t show that the EU demand put its business or financial health at risk, EU General Court President Marc Jaeger said in an order on the tribunal’s website.

While San Diego-based Qualcomm can keep up the fight over the issue, it must comply and hand over information to officials.

Qualcomm could be on the hook for penalties “in the range of several millions of euros” for resisting the call for the data, needed in the final stages of an EU investigation into predatory pricing of chipsets that aimed to crush a smaller rival, according to the court order.

The company said the EU competition authority’s demand involved enormous work and significant financial costs estimated at no less than 3 million euros as it involved more than 50 employees and 16 external advisers, according to its court filing. Court President Marc Jaeger dismissed the appeal in a July 12 ruling.

The risk of new fines adds another front to Qualcomm’s battles with regulators over its sales tactics as Apple Inc. ramps up a global dispute with the company, withholding billions of dollars in payments that’s forced Qualcomm to cut forecasts. Qualcomm has fought back by asking the International Trade Commission in Washington to stop versions of the iPhone that aren’t built with its chips from entering the U.S.

Qualcomm Stock Performance

Currently, Qualcomm shares are down 0.19% to $56.70 in today’s session. The firm opened at $56.73 with a current session high of $56.92 and a session low of $56.60. The stock has a market capitalization of $84.75 billion, a P/E ratio of 18.89, and a dividend yield of 4.02%.

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American Airlines Cuts Ties With Qatar, Etihad Amid Airline Clash

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American Airlines Group Inc. announced the end of its code-share agreements with the airlines, Qatar Airways and Etihad as the Forth Worth, Texas-based airline holding company attributed the decision to its disapproval of subsidies that the Middle East carriers receive from the Gulf states.

The company said on Wednesday it will end code-share agreements with Qatar and Etihad after the close of business on March 2018. American said it gave the two carriers notice of its decision on June 29, one week after it revealed in a Securities and Exchange Commission filing that Qatar wanted to buy up to 10% of its stock.

The cancellation of the agreements, which allow the airlines to sell tickets on one another’s flights as if they were their own, comes amid a tense dispute between US airlines and their Middle Eastern rivals over allegations of illegal subsidies.

Illegal Subsidies

American Airlines and its U.S. peers have accused the highly subsidized Middle Eastern carriers Etihad, Emirates and Qatar, known as the ME3, of violating the Open Skies accords in their rapid expansion in America.

“Given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the code-sharing relationships between American and these carriers no longer make sense for us,” American said in a prepared statement.

Etihad said it was disappointed with the decision, indicating that the mutually beneficial code-share in place sine 2009 has provided customers with more and better flight options to destinations that historically have not been served by U.S. airlines. The Middle Eastern airline called American’s choice anti-competitive and anti-consumer, as it “may result in higher fares for travelers to and from the U.S.”

Qatar Airways To Continue To Buy AA Stake

American confirmed that Qatar Airways intends to continue with its plan to buy an unsolicited equity stake in the airline.

Qatar Airways sent a revised antitrust filing to U.S. regulators on Wednesday seeking clearance to buy up to a 10% stake in the U.S. carrier, according to the filing.

A stake in American would add to Qatar Airways’ investment portfolio, which already includes a 20 percent stake in British Airways-owner International Airlines Group and 10 percent of South America’s LATAM LAN.SN.

American Airlines CEO Doug Parker, however, said in a letter to his employees last month that “We aren’t particularly excited about Qatar’s outreach” and that it was puzzling given the U.S. carrier’s very public stance on state support given to Gulf carriers.

American Airlines Stock Performance

Currently, American Airlines shares are steady 0.02% to $53.81 in today’s session. The firm opened at $53.40 with a session high of $54.48 and a session low of $53.15. The stock has a market capitalization of $27.63 billion, a P/E ratio of 13.15, and a dividend yield of 0.74%.

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OPEC Compliance With Oil Cuts At Lowest In 6 Months

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OPEC’s compliance with production cuts fell in June to its lowest levels in six months as several members pumped much more oil than allowed by their supply deal, thus delaying market rebalancing, the International Energy Agency said on Thursday.

Global oil supply rose in June as compliance with an OPEC-led deal to freeze production showed signs that it was stalling.

OPEC’s compliance with cuts dropped to 78% last month from 95% in May as higher-than-allowed output from Algeria, Ecuador, Gabon, Iraq, the UAE and Venezuela balanced out strong compliance from Saudi Arabia, Kuwait, Qatar and Angola.

“Each month something seems to come along to raise doubts about the pace of the rebalancing process. This month, there are two problems: a strong recovery in oil production from Libya and Nigeria and a lower rate of compliance by OPEC with its own output agreement,” the Paris-based IEA said.

The supply of oil increased by 720,000 barrels a day in June across the world and by 340,000 barrels a day in OPEC countries. This was caused by higher production even in those countries subject to an OPEC-led deal to cut production. Saudi Arabia has increased its flows, the IEA said, as well as Libya and Nigeria who are not part of the production freeze.

“Higher output from members bound by the production pact knocked compliance to 78 percent in June, the lowest rate during the first six months of the agreement,” the IEA said in the report.

The agency also said that “compliance with agreed non-OPEC output curbs improved to 82 percent in June, overtaking compliance from OPEC for the first time since the cut took effect in January.”

The Organization of the Petroleum Exporting Countries and several non-OPEC producers, including Russia, have agreed to cut production by around 1.8 million barrels per day until March 2018 to ease a global crude glut spurred by booming U.S. output. But there are doubts mounting over the sustainability of the deal. Kazakhstan, for example, has said it wants a gradual exit from the output cap deal.

OPEC members Libya and Nigeria were exempted from the cuts due to years of unrest that have sapped their output. The two countries have managed to increase their combined production by more than 700,000 bpd in recent months, the IEA said.

“For fellow OPEC members, who agreed to reduce production by 1.2 million bpd, to see their cut effectively diluted by nearly two-thirds must be very frustrating, especially as their pact has, hitherto, been well observed by historical standards,” the IEA said.

The cuts have stabilized oil at around $45-50 per barrel, but prices have come under renewed pressure in recent weeks due to growing U.S. output and little evidence of global stocks falling from record highs above 3 billion barrels.

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