TOKYO - The dollar wallowed against the yen and other major currencies on Wednesday after the sudden dismissal of US Secretary of State Rex Tillerson killed off an earlier bounce in the currency.
US President Donald Trump fired Tillerson on Tuesday after a series of public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with loyalist CIA Director Mike Pompeo.
It was deja vu for the currency market and the dollar, which had declined a week ago when the exit of White House economic advisor Gary Cohn undermined investor sentiment towards the greenback.
The dollar was down 0.1 percent at 106.490 yen, having slipped overnight from a 2-week high of 107.300 reached after wariness over a political scandal in Japan waned slightly.
The greenback also lost a bit of traction after the February US inflation data released on Tuesday was in line with expectations, suggesting the Federal Reserve remained on track to raise interest rates at a gradual pace.
Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, said comings and goings in the White House were becoming something of an everyday occurrence and that dollar's reaction was likely to become more limited each time.
"For the dollar to rise above 107 yen again, it may need a clarification of the ongoing political scandal in Japan in addition to a hint by the Fed at this month's meeting that it might accelerate the pace of rate hikes," Yamamoto said.
The yen had risen against the dollar at the start of the week as a political scandal engulfed Japanese Prime Minister Shinzo Abe and his close ally, Finance Minister Taro Aso.
The Japanese currency advanced as the cronyism scandal raised doubts about Abe's ability to continue pursuing his economic policies, dubbed "Abenomics," which included aggressive monetary easing.
The Fed holds a 2-day policy meeting starting on March 20 and the central bank is widely expected to raise interest rates for the first time this year.
The dollar index against a basket of six major currencies was little changed at 89.711 after it tracked a decline in US yields and shed 0.25 percent on Tuesday.
The euro was steady at $1.2394 after rising 0.45 percent overnight.
The pound was up 0.1 percent at $1.3982 and in close reach of a two-week peak of $1.3994 scaled on Tuesday on the back of the dollar's broad decline.
The Australian dollar was steady at $0.7860 after bouncing to a 2-week high of $0.7898 the previous day on robust business indicators.
source: news.abs-cbn.com
The White House has developed a plan to replace Secretary of State Rex Tillerson with Central Intelligence Agency Director Mike Pompeo within the next several weeks, the New York Times reported Thursday.
Under the plan, Sen. Tom Cotton of Arkansas would take over for Pompeo at the helm of the CIA, the paper said in its online edition, quoting senior administration officials.
It was not immediately clear whether President Donald Trump has given final approval to the plan developed by his chief of staff John Kelly, according to the paper.
Asked by reporters about the matter at the start of his Oval Office meeting with the crown prince of Bahrain, Trump only said, "He's here. Rex is here."
Tillerson has been at odds with Trump's White House on a range of issues such as Iran, Qatar and most recently North Korea.
According to the report, Cotton, a Republican who has been a key ally of Trump on national security issues, has signaled that he would accept the CIA job if offered.
Under the plan, the shake-up of Trump's national security team would happen around the end of the year or shortly after, it said.
While some administration officials initially expected Tillerson to be replaced by U.S. Ambassador to the United Nations Nikki Haley, Pompeo has become the White House favorite.
Pompeo has impressed Trump during daily intelligence briefings and become a trusted policy adviser even on issues beyond the CIA's normal mandate such as health care, according to the paper.
The rift between the president and his chief diplomat came to light in early October following a news report that Tillerson was on the verge of resigning this past summer amid policy disputes with Trump.
It was also reported that Tillerson called Trump a "moron" after a July 20 meeting at the Department of Defense with members of Trump's national security team and Cabinet officials.
source: news.abs-cbn.com
BEIJING - US Secretary of State Rex Tillerson will hold top-level talks in China on Saturday as the United States looks to tighten an economic squeeze aimed at persuading North Korea to retreat from its nuclear arms and missile programs.
The United States sees China as critical to averting a military confrontation with Pyongyang, which is fast advancing toward its goal of developing a nuclear-tipped missile capable of reaching the United States.
US officials say Beijing appears increasingly willing to cut ties to North Korea’s economy by adopting U.N. sanctions, after long accounting for some 90 percent of its neighbor’s foreign trade.
But to succeed in reaching any kind of diplomatic solution, Tillerson would need to overcome some basic US assumptions about North Korea and China.
The first would be getting North Korean leader Kim Jong Un to view nuclear weapons as a liability, not a strength. The US intelligence community does not believe Kim is likely to willingly give up his weapons program.
“(Tillerson’s) working against the unified view of our intelligence agencies, which say there’s no amount of pressure that can be put on them to stop,” Senator Bob Corker told a Senate hearing on Thursday.
Kim, Corker said, saw nuclear-tipped intercontinental ballistic missiles as “his ticket to survival.”
The second big challenge for Tillerson would be getting China to impose economic sanctions on North Korea so harsh that Kim might question his future if they persisted.
US officials, speaking on condition of anonymity, say they believe China’s priority is stability on the Korean peninsula, since a political collapse would almost certainly push destabilizing waves of refugees into northeastern China.
China says it will strictly and fully enforce U.N. resolutions against North Korea and its Commerce Ministry on Thursday said North Korean firms in China and joint ventures in China and overseas would be shut down by January, in line with the latest UN resolution.
But the latest sanctions need time before they begin to bite, the official China Daily cautioned in an editorial on Friday.
US President Donald Trump, who is due to visit China in November, has called for it to do more on North Korea and has promised to take steps to rebalance a trade relationship that his administration says puts US businesses at a disadvantage.
Tillerson, whose arrival in Beijing was delayed due to mechanical problems with his aircraft, told Chinese Foreign Minister Wang Yi that Trump was looking forward to his China visit.
Tillerson will also hold talks with President Xi Jinping, and China’s top diplomat State Councillor Yang Jiechi, who outranks the foreign minister.
The US State Department did not suggest any major announcements would be made on Tillerson’s trip but the China Daily said it needed to be more than a “routine show of mutual goodwill” ahead of Trump’s visit.
“The guest and his hosts must ... straighten at least one thing out - what each can expect from the other to ensure the situation on the Korean peninsula does not deteriorate and spiral out of control,” it said.
UNACCEPTABLE OPTIONS
Senator John McCain, who heads the Senate Armed Services Committee, said this week he was skeptical.
“The ideal, we all know, is China. China has not done anything for the last three presidents. I’m not sure that they’re going to do anything with this one,” McCain told a security conference in Washington hosted by the Institute for the Study of War.
McCain has repeatedly warned that the United States, which neither wants to live with a nuclear-armed North Korea nor go to war with it, may be faced with “unacceptable options.”
US officials have declined to discuss operational plans, but acknowledge that no existing plan for a preemptive strike could promise to prevent a brutal counterattack by North Korea, which has thousands of artillery pieces and rockets trained on Seoul.
White House National Security Adviser H.R. McMaster said on Monday that even military options short of a preventative strike, such as a naval blockade meant to enforce sanctions, carried risks of military escalation.
Tillerson has in the past expressed hope for dialogue with North Korea. US diplomats have also sought to assure Pyongyang that Washington is not seeking to oust Kim, even as Trump and Kim exchange insults and threats of war.
“We are not seeking regime change or collapse,” State Department Assistant Secretary Susan Thornton, who is traveling with Tillerson, told a Senate hearing on Thursday.
Thornton’s remarks were welcomed in Beijing, which is calling for a peaceful solution to the crisis.
Chinese Foreign Ministry spokesman Lu Kang said the United States had issued many “positive signals” that the North Korean nuclear issue should be resolved via talks.
Still, it is unclear how and when negotiations with Pyongyang might be possible.
McMaster said there was no set list of preconditions for talks but added Pyongyang’s capabilities had advanced too far to simply freeze its program in return for concessions.
He cited academic reports about actions North Korea could take to suggest it was serious about talks, such as allowing International Atomic Energy Agency inspectors access to key sites and stating that Pyongyang was willing to denuclearize.
“What we want to see is negotiations that begin under fundamentally different conditions” than in the past, McMaster said. (Reporting by Phil Stewart, Ben Blanchard and Michael Martina in Beijing; Editing by Simon Cameron-Moore)
source: news.abs-cbn.com
