Investing.com - Here are the top five things you need to know in financial markets on Thursday, January 5:
1. Dollar stumbles after Fed meeting minutes
The U.S. dollar stepped further away from a 14-year peak against a basket of major currencies on Thursday, extending weakness from the prior session when Federal Reserve minutes pointed to a number of risks that could change the path for interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped to as low as 101.73, the weakest in three weeks, just two days after it had hit a 14-year high of 103.82. It was last at 102.48 by 6:00AM ET (11:00GMT), down less than 0.1%.
Against the yen, the dollar was down around 0.45% at 116.70, after falling to as low as 115.59.
Meanwhile, the euro tacked on 0.1% against the greenback to 1.0499, extending its recovery from the 14-year trough of 1.0339 set on Monday.
2. China's yuan soars against the greenback
China's yuan soared against the U.S. dollar on Thursday, following a sharp rise in the offshore spot rate as China worked to stem capital flows and stabilize the currency ahead of Donald Trump's inauguration as U.S. president and the Lunar New Year.
The offshore yuan gained 0.45% against the dollar and traded at 6.8345 after rising by more than 1% to 6.7854 earlier.
China has been making great efforts to stabilize its currency ahead of U.S. President-elect Donald Trump's inauguration and the Chinese New Year later this month by taking actions that affect both onshore and offshore markets.
3. U.S. service sector, jobs-related data ahead
Key U.S. reports later in the day should provide further evidence if the world’s largest economy is strong enough to withstand higher borrowing costs in the months ahead.
ADP payrolls data is released at 8:15AM ET (13:15GMT). Economists expect 170,000 private sector payrolls, just below the 178,000 consensus for total December nonfarm payrolls, expected on Friday.
Weekly jobless claims are released at 8:30AM ET, while Markit services PMI is released at 9:45AM ET and ISM non-manufacturing data is released at 10:00AM ET.
Traders continued to price in two rate hikes this year and slightly less than a 50% chance of a third, according to Investing.com's Fed Rate Monitor Tool.
4. Oil holds steady ahead of weekly U.S. stockpile data
Oil prices held steady on Thursday, as market players awaited fresh weekly information on U.S. stockpiles of crude and refined products.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 11:00AM ET (16:00GMT) Thursday, amid analyst expectations for a decline of 2.2 million barrels. The report comes out one day later than usual due to the holidays.
After markets closed Wednesday, the American Petroleum Institute said that U.S. oil inventories fell by 7.4 million barrels in the week ended December 30.
U.S. crude was up 3 cents, or less than 0.1%, at $53.30, while Brent dipped 2 cents to $56.44 a barrel.
5. Global stocks struggle for gains, Dow to try again for 20K
U.S. stock markets were struggling for direction on Thursday morning, with the Dow remaining within sight of the closely-watched 20,000-level before the release of key U.S. data.
European equities fluctuated around the unchanged mark in choppy morning trade, while London's FTSE100 rose to a fresh record-high.
In Asia, markets ended mixed, with the Shanghai Composite in China closing up 0.2%, while Japan's Nikkei lost around 0.3%.