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The dollar nursed hefty losses against the yen and euro on Thursday after tumbling overnight when a top Federal Reserve official tempered expectations on the timing of future US interest rate increases. The US currency took a beating after New York Fed President William Dudley said financial conditions were considerably tighter and a weakening outlook for the global economy would have to be taken into account.

With hindsight, few dispute that the Fed missed an opportunity to raise rates in 2014. No doubt, tightening policy at that stage would have created its own messy side-effects. That said, the benefits would have been significant, writes former Dallas Fed adviser Danielle DiMartino Booth.

Beneath the surface of the global financial system lurks a multitrillion-dollar problem that could sap the strength of large economies for years to come. The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. (Reuters, FT, NYT)

In the news

UN panel rules in Assange’s favour A UN panel has ruled that WikiLeaks founder Julian Assange has been “arbitrarily detained”, the BBC understands. Mr Assange took refuge in London’s Ecuadorean embassy in 2012 to avoid extradition to Sweden over sex assault claims, which he denies. He earlier tweeted he would accept arrest if the panel ruled against him, but called for the arrest warrant to be dropped if the decision went his way. The UN ruling has no formal sway, however, and the UK has indicated it still has an obligation to extradite Mr Assange. (BBC)

Shell profits dive Royal Dutch Shell suffered an 80 per cent slide in profits last year, as a sustained slump in oil prices battered revenues across the energy industry. The Anglo-Dutch company, the latest of the US and European majors to detail the effects of the crude price collapse on earnings, said full-year profits, on a current cost of supplies basis, fell from $19bn a year ago to $3.8bn. (FT)

Credit Suisse steps up cost cutting The Swiss lender has vowed to take more drastic action on costs after reporting worse than expected fourth-quarter results that sent the bank’s shares to a 24-year low. Shares in the Swiss lender fell by more than 13 per cent in early trading as investors digested weak earnings in the fourth quarter, a deterioration in the bank’s capital position and a gloomy outlook. (FT)

Notes from underground Israel’s military establishment and defence companies are developing technology to shield them on a new front: underground. The country’s ministry of defence this week confirmed that the US had earmarked $120m over three years to help it develop and produce a system to detect tunnels built by its enemies. (FT)

The future of search history Google has put an artificial intelligence expert in charge of its search algorithms, signalling a sea change in one of the core technologies of the internet that may ultimately give intelligent machines the job of finding and sorting information for humans. (FT)

China reviews support for N Korea North Korea’s January nuclear test, its fourth in a decade, has presented China’s leaders with a ​dilemma. President Xi Jinping is under pressure to decide whether to continue Beijing’s policy of unswerving support for its ally in Pyongyang, or to co-operate with​ ​the international community in imposing tough new sanctions. If China’s president opts for the latter, he might find backing from a surprising source: the Chinese public. (NAR)

Goldman warns on Brexit Sterling could fall as much as 15-20 per cent if Britain votes to leave the European Union, a scenario that could alarm foreign investors and dry up the capital inflows needed to fund the current account deficit, Goldman Sachs said. “The UK’s current account deficit would still be a source of vulnerability despite some recent improvement,” the US investment bank said in a client note. (Reuters)

It’s a big day for

Syrian refugees Britain and Norway have pledged to spend an additional $2.9bn in aid for Syrians by 2020, seeking to build momentum for a donor conference that the United Nations hopes will raise more than $7bn for this year alone. With Syria’s five-year-old civil war raging and UN-mediated peace talks in Geneva halted after just a few days, the one-day London conference will try to tackle dire humanitarian needs. (Reuters, FT)

Food for thought

Europe’s maritime threat As Europe’s politicians struggle to control a deepening migrant crisis and staunch the rising threat of Islamist terrorism on their borders, little attention is being paid to the continent’s biggest frontier: the sea. New data highlight the extent to which smuggling, bogus shipping logs, unusual coastal stop-offs and inexplicable voyages are increasing across the Mediterranean and Atlantic for ships passing through Europe’s ports, with little or nothing being done to combat the trend. (FT)

Control and crucifixions in divided Libya Two rival factions are locked in a political battle to form a unity government in Libya, fuelling US worries of Libya turning into a hub for Islamic State operations. IS fighters, meanwhile, have established a reign of terror in the coastal city of Sirte, where they impose their own rule of law, with dress codes for men and women and segregation in school classrooms. Punishments include imprisonment, amputations, public crucifixions and beheadings. (WSJ, BBC)

Anti-ageing remedy Removing tired-out cells can extend an animal’s lifespan, say researchers at the Mayo Clinic, whose study found that mice lived about 25 per cent longer if so-called “senescent” cells were cleared out. The results, reported in Nature, outline a possible new tactic for treating diseases including glaucoma, arthritis and heart disease, and potentially extending human life, according to lead author Jan van Deursen. (MIT Tech Review)

Venezuelan catastrophe Three-dozen heavily laden 747 cargo planes have arrived in Caracas from around the world in recent months to service Venezuela’s crippled economy. But instead of food and medicine, the planes carried another scarce resource: bills of Venezuela’s currency, the Bolívar. A disorderly default on an Argentine scale is almost inevitable, writes Ricardo Hausmann. (WSJ, FT)

Australia’s fertile north Australia’s ​huge ​tropical Northern Territory remains largely undeveloped. But for Asian countries, the area holds tremendous potential as a source of food and natural resources. (NAR)

Video of the day

John Authers reports on how lacklustre data on the US services economy sparked a strong day for the crude oil price but pushed down the US dollar. (FT)

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