Dollar holds steady after U.S., China reach framework deal to ease export curbs
The dollar was steady against its major peers on Wednesday, after U.S. and China agreed on a framework for a trade agreement that investors hoped could potentially pave the way to resolving a damaging trade war between the world's two largest economies.
In early Asia trading, the dollar was down 0.14% against the Japanese yen at 144.770, and slipped 0.13% against the Swiss franc to last change hands at 0.8218.
The euro was flat at $1.1427, while China's offshore yuan was little changed at 7.1881 per dollar.
An index that measures the greenback against six other currencies was little changed and was last at 99.068.
U.S. Commerce Secretary Howard Lutnick said that U.S. and Chinese officials concluded keenly watched talks in London that lasted for two days and agreed to put their trade truce reached last month in Geneva back on track.
The framework included resolving China's export restrictions on rare earth minerals and magnets, and will also remove some U.S. export restrictions that were recently put in place.
"The devil is going to be in the details and importantly whether this can help to reestablish trust between President Xi and President Trump, which has clearly been broken since the Geneva Agreement was published," said Ray Attrill, head of FX strategy at National Australia Bank.
"But it's way too early to say that we know we're in the midst of establishing a cast iron, new U.S.-China trade agreement."
Much of the year has been dominated by investors fretting over the likelihood that U.S. President Donald Trump's erratic policies could tip the U.S. economy into a recession, and in turn hurt global growth.
The erosion of investor confidence in U.S. assets has severely undermined the dollar, which is down more than 8% so far this year.
Later in the day, investors will closely parse a U.S. consumer inflation report that could reflect the economic impact of tariffs on prices, potentially determining the trajectory of the Federal Reserve's monetary policy for the rest of the year.
The Fed is expected to hold rates steady next week, with traders pricing in nearly two 25-basis-point cuts by the end of the year.
UK's sterling was marginally higher at $1.35 as markets awaited British finance minister Rachel Reeves' public spending plans. The currency came under pressure overnight after data pointed to a weak labor market.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
15 minutes ago
- Yahoo
Britain ‘becoming a national health state' under Reeves
Britain is becoming a 'national health state' under Rachel Reeves, with treatment poised to account for half of all public services spending by the end of the decade. Analysis by the Resolution Foundation said the Chancellor was presiding over a 'major reshaping of the state' that will pave the way for more tax rises after she boosted NHS budgets in the spending review. The Left-leaning think tank said the health service was on course to account for almost £1 in every £2 of all day-to-day Whitehall spending by the next election. This is up from a third in 2010 and a quarter in 1999. Health accounts for 90pc of the extra public service spending over the next three years at the expense of other Whitehall departments, the Resolution Foundation said. This includes defence, which saw a much smaller increase in its day-to-day spending budget, although investment spending for tanks, planes and military bases saw a much bigger increase. The think tank warned that this trend had led to 'shrunken public services elsewhere'. It noted that while real, per-person funding for health was set to increase by 36pc between 2009 and 2029, spending on prisons and the courts would fall by 16pc while housing and local government budgets were on course to fall by 50pc over the same period. British families are already on the hook for the equivalent of £1,550 of tax rises after October's record £40bn raid by the Chancellor. But Ruth Curtice, the chief executive of the Resolution Foundation, said people faced more pain in the coming months. She said: 'The spending review was a huge deal as the Chancellor set out details of nearly £300bn of extra spending over the second half of the [current] parliament. But as the dust settles a few clear winners have emerged. 'The extra money in this spending review has already been accounted for in the last forecast. But a weaker economic outlook and the unfunded changes to winter fuel payments mean the Chancellor will likely need to look again at tax rises in the autumn.' Ms Reeves has been accused of sacrificing police and defence spending in favour of a record NHS handout, with households now facing higher council tax bills to pay to keep their streets safe. Treasury documents revealed that the Government was already forecasting a 5pc increase in council tax each year until 2028, meaning an extra £395 for the average B and D band properties. Ms Reeves's plans also show that total non-defence investment will suffer cuts on average for the rest of this parliament. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
16 minutes ago
- Yahoo
Xi Plays Long Game on US-China Trade as Trump Seeks Quick Wins
(Bloomberg) — While Donald Trump hailed the outcome of trade talks in London, Xi Jinping walked away with an understated strategic gain: a negotiating process that buys China time and helps defuse the threat of more harmful tariffs and technology curbs. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban NY Long Island Rail Service Resumes After Grand Central Fire Do World's Fairs Still Matter? Shortly after two days of negotiations wrapped, Trump declared Wednesday on social media that a deal had been 'DONE' to restore the flow of critical magnets from China, and pledged to lift curbs on student visas. Hours earlier, US Commerce Secretary Howard Lutnick revealed Washington would unwind its recent tech curbs, if niche metals essential to US auto and defense firms now flowed fast enough. China's focus was very different. A People's Daily commentary on Thursday — Beijing's most substantial comments so far on the talks — made no mention of export controls. Instead, the Communist Party mouthpiece touted an 'institutional guarantee' established in Geneva for the two sides to bridge differences via a 'consultation mechanism.' In a long-awaited leaders' call before the London negotiations, Xi told Trump the importance of using this channel, it added. The contrast illustrates a disconnect in how the world's biggest economies want to manage their trade dispute, and broader rollercoaster relationship. While Trump seeks quick deals done directly with top leaders, Xi favors a framework led by his lieutenants that wards against being blindsided. Such haggling could drag on for years, with the 'Phase One' deal from the first trade war taking most of Trump's first term. 'Xi is playing a longer game on US-China trade. His time in office is simply much longer than Trump's,' said Christopher Beddor, deputy China research director at Gavekal Research. 'That's not to say there's never any short-term thinking, but the lack of term limits presents very different incentives than for Trump.' While slow-walking negotiations allows China the chance to assess how hard a bargain Trump drives with other nations, the lingering uncertainty is bad for business, he added. Xi showed last week he can be flexible, getting on the phone with Trump as ties spiraled, breaking from the protocol to set up such an interaction. In the Biden era, then National Security Advisor Jake Sullivan and Foreign Minister Wang Yi would huddle in foreign locations for days before their leaders spoke directly, managing outcomes and expectations. While the Geneva talks last month wrapped with an identical US-China statement, suggesting a degree of alignment, that accord quickly fell apart over US claims China reneged on a promise to release shipments of rare earths. Beijing says it always intended to keep in place a permit process, which American companies complained moved so slowly some factories were forced to pause production. The lack of a detailed read out from either side this time around has left much in doubt, including on what Beijing committed to on the export of niche metals used in everything from fighter jets to electric vehicles. Lutnick told CNBC on Wednesday that China was going to approve 'all applications for magnets from the United States companies right away' — a sweeping claim that appeared to leave plenty of room for disappointment. Chinese Commerce Ministry spokesman He Yadong pledged his country would 'fully consider the reasonable needs and concerns of all countries in the civilian sector,' at a regular press briefing in Beijing on Thursday, adding that approval work was being strengthened. 'The Chinese incentive is also to keep cards close to their chest, and not make a lot of proclamations about what they have or have not committed to,' said Arthur Kroeber, founding partner and head of research at Gavekal. 'There is a lot of leeway for them within the whole export licensing regime.' One approach could be to restart enough export licenses so commercial buyers aren't stymied, but not so much that firms can stockpile, thus blunting Beijing's future leverage, he added. Adding to the fuzziness, Trump declared on social media that China now faces a 55% charge, a number that appears to include levies introduced during his first presidency. It also combines a 10% baseline duty imposed by Trump and a 20% tax tied to fentanyl trafficking — an area where Beijing was seen as having room to negotiate if it stepped up scrutiny of its companies. Lutnick cast doubt on that, and raised questions about the nature of future negotiations, saying that tariffs on China would 'definitely' stick at their current level. That suggests a 90-day pause set to expire in August on Trump's blanket 145% rate was now irrelevant. Such a position also dilutes the incentive for Beijing to offer concessions in future trade talks, if tariffs can't budge. While China has felt the pain from US levies, with exports to the world's largest economy plunging 34% in May, Trump appears to be in the bigger hurry to get a deal. His administration is facing a self-imposed July 9 deadline to either strike pacts with dozens of global trading partners or reimpose sweeping tariffs. In a sign of the Republican leader's growing impatience, he warned Wednesday that he will soon send letters to countries saying, 'this is the deal, you can take it or leave it.' Exemplifying that willingness to keep things moving, Trump's team in a rare move this week put export controls on the negotiating table — previously, such tools have been justified with national security concerns, and were largely off limits. Watering down that rationale could open the door to more cooperation, and advance Trump's stated goal to 'open up China to American trade.' Still, China is unlikely to agree to large purchases of goods that compete in areas where Beijing is looking to build self sufficiency and nurture its own national champions. Rebalancing their economies, a concept touted by US Treasury Secretary Scott Bessent, could involve attracting more Chinese investment into the US. Policy whiplash by the Trump administration might deter many Chinese companies from pouring money into the US economy, even if Xi were to encourage them to do so. Addressing these issues will take time, presumably requiring long discussions using the mechanism that China and US included in what Beijing called their 'hard won' agreement. 'Some people say that the result of the London talks was just a framework,' said Zhu Junwei, a former researcher in the People's Liberation Army who is now director of American research at Grandview Institution in Beijing. 'It's better to have a framework than have nothing.' —With assistance from Jing Li and Lucille Liu. American Mid: Hampton Inn's Good-Enough Formula for World Domination New Grads Join Worst Entry-Level Job Market in Years The Spying Scandal Rocking the World of HR Software US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling ©2025 Bloomberg L.P.
Yahoo
16 minutes ago
- Yahoo
Billionaire Blavatnik courted to take Daily Telegraph stake
The billionaire who has bankrolled DAZN, the sports-streaming service, is being courted to take a stake in The Daily Telegraph alongside the newspaper's new American majority-owners. Sky News has learnt that Sir Len Blavatnik, whose holding company Access Entertainment owns assets in Britain, including the Theatre Royal Haymarket, has been approached by RedBird Capital Partners about becoming a minority investor in the Telegraph titles. Two sources close to the situation said on Thursday that Sir Len was being sounded out about a deal, although they cautioned that no agreement had been struck and it remained unclear whether one would be. Sir Len, who was knighted by the late Queen Elizabeth II for services to philanthropy in 2017, is a prolific investor in the arts, media and entertainment industries. Access Entertainment is run by Danny Cohen, the former BBC director of television. Announcing its agreement to acquire Telegraph Media Group last month for an enterprise valuation of £500m, RedBird Capital said it was "in discussions with select UK-based minority investors with print media expertise and strong commitment to upholding the editorial values of the Telegraph". This was principally a reference to Lord Rothermere, the Daily Mail proprietor, who remains in talks to pay more than £30m for a stake in the Mail's rival right-leaning newspaper group. Goldman Sachs is advising DMGT on the investment, with a deal the subject of ongoing discussions, according to insiders. Read more: The Abu Dhabi state-backed vehicle IMI is still expected to acquire the maximum 15% stake in the Telegraph permitted under proposed new media ownership rules. The government's decision to set the ownership threshold at 15% follows an intensive lobbying campaign by newspaper industry executives concerned that a permanent outright ban could cut off a vital source of funding to an already-embattled industry. However, the deal faces continued opposition from parliamentarians, with The Guardian reporting on Thursday that a cross-party group had written to Lisa Nandy, the culture secretary, warning of "potential Chinese state influence" because of links between RedBird Capital chair John Thornton and China's sovereign wealth fund. This suggestion has been dismissed by RedBird Capital insiders. Ukraine-born Sir Len's portfolio of investments includes DAZN, which is now also backed by a Saudi sports group, mobile games studio Tripledot and Scenario Two, a theatre production company. Dovid Efune, the owner of The New York Sun, is meanwhile continuing to assemble a rival bid for the Telegraph, having secured backing from Jeremy Hosking, the prominent City investor. His prospects, however, look to have diminished after the former chancellor, Nadhim Zahawi, was reported to have withdrawn from his so-called 'British bid'. The Telegraph titles' parent company was forced into insolvency proceedings two years ago by Lloyds Banking Group, which ran out of patience with the Barclay family, their long-standing owner. RedBird IMI, a joint venture between the two firms, paid £600m several months later to acquire a call option that was intended to convert into ownership of the Telegraph newspapers and The Spectator magazine. That objective was thwarted by a change in media ownership laws, which banned any form of foreign state ownership. Some parliamentarians are continuing to argue that a 15% threshold would be too high, and that the proposed rules are ambiguous because they potentially allow for more than one state investor to aggregate their holdings in British newspapers. The Spectator was sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor. RedBird Capital has been contacted for comment, while a call to Access Industries' London office went unanswered on Thursday lunchtime.
