Dollar Moves Higher on Signs of US Economic Strength
The dollar index (DXY00) Thursday rose by +0.37%. The dollar moved higher Thursday on signs of strength in the economy after weekly jobless claims fell to a 1-month low and the May S&P manufacturing PMI unexpectedly increased, hawkish factors for Fed policy.
However, gains in the dollar are limited after the House on Thursday passed President Trump's tax and spending plan, which will add to the burgeoning US budget deficit. The bill now goes to the Senate for approval.
The dollar still has some negative carryover from last Friday when Moody's Ratings downgraded the US government's credit rating from Aaa to Aa1, citing a ballooning budget deficit and fiscal concerns. The downgrade put the dollar's status as a global reserve currency into question and may prompt some investors to lighten up on their dollar assets.
Also, dovish comments on Thursday from Fed Governor Waller were negative for the dollar when he said the Fed could cut interest rates the second half of the year if tariffs settle near 10%.
US weekly initial unemployment claims unexpectedly fell -2,000 to a 1-month low of 227,000, showing a stronger labor market than expectations of an increase to 230,000.
The US May S&P manufacturing PMI unexpectedly rose +1.9 to 52.3 versus expectations of a decline to 49.9.
US Apr existing home sales unexpectedly fell -0.5% m/m to a 7-month low of 4.00 million, weaker than expectations of an increase to 4.10 million.
Fed Governor Waller said if the Trump administration's tariffs on US trading partners settle around 10% this summer, "then we're in a good position at the Fed to kind of move with rate cuts through the second half of the year."
The markets are discounting the chances at 5% for a -25 bp rate cut after the June 17-18 FOMC meeting.
EUR/USD (^EURUSD) Thursday fell by -0.42%. Thursday's dollar strength weighed on the euro. The euro also fell on the dovish summary of the ECB's April 16-17 policy meeting, where members signaled a bias toward further monetary easing. In addition, Thursday's monthly report from the Bundesbank was bearish for the euro, as it said that after modest growth in Q1, output in Germany would probably stagnate in Q2.
Losses in the euro were limited Thursday after the Eurozone May S&P manufacturing PMI rose more than expected to a 2-3/4 year high. Also, the German May IFO business climate index rose more than expected to an 11-month high.
The Eurozone May S&P manufacturing PMI rose +0.4 to a 2-3/4 year high of 49.4, stronger than expectations of 49.2. However, the May S&P composite PMI unexpectedly fell -0.9 to a 6-month low of 49.5, weaker than expectations of an increase to 50.6.
The German May IFO business climate index rose +0.6 to an 11-month high of 87.5, stronger than expectations of 87.3.
The April 16-17 ECB meeting summary was dovish as policymakers expressed concern about the negative economic impact of US tariffs and signaled a bias toward additional monetary easing. Policymakers also said, "Even with the additional spending on defense and infrastructure, it was likely that, on balance, Eurozone growth would be worse in 2025 than previously expected."
In its monthly report, the Bundesbank said that after modest growth in Q1, output would probably stagnate in Q2, citing a "wide range of negative factors" that are compounded by US trade tariffs hitting German exporters. Also, "due to the economic downturn, uncertainty about the future economic development, and lower inflation rates, wage settlements are likely to remain significantly lower than in the past two years."
Swaps are discounting the chances at 95% for a -25 bp rate cut by the ECB at the June 5 policy meeting.
USD/JPY (^USDJPY) Thursday rose by +0.29%. The yen retreated from a 2-week high against the dollar Thursday and turned lower after Treasury Secretary Bessent and Japanese Finance Minister Kato said currency levels weren't discussed in a meeting in Canada. The officials said exchange rates should be determined by the market, which suggests the US has no issue with the yen's level after President Trump earlier accused Japan of taking an unfair advantage by lowering the yen's value. The stabilization of stocks on Thursday also reduced safe-haven demand for the yen.
The yen on Thursday initially moved higher on strength in Japanese economic news after Mar core machine orders unexpectedly rose at the fastest pace in 17 years, and the May Jibun Bank manufacturing PMI rose. Also, rising Japanese government bond yields supported the yen after the 10-year JGB bond yield jumped to a 1-3/4 month high Thursday of 1.582%. In addition, hawkish comments on Thursday from BOJ Board member Noguchi boosted the yen when he said the BOJ doesn't need to step into the bond market to take action against a recent spike in long-term bond yields.
Japan Mar core machine orders unexpectedly rose +13.0% m/m, stronger than expectations of a decline of -1.6% m/m and the largest increase in 17 years.
The Japan May Jibun Bank manufacturing PMI rose +0.3 to 49.0. However, the May Jibun Bank services PMI fell -1.6 to 50.8.
BOJ Board member Noguchi said the BOJ doesn't need to step into the bond market to take action against a recent spike in long-term bond yields, as the moves are not necessarily abnormal.
June gold (GCM2 5) Thursday closed down -18.50 (-0.56%), and July silver (SIN2 5) closed down -0.427 (-1.27%). Precious metals on Thursday gave up an early advance and turned lower, with gold falling from a 1-1/2 week high and silver falling from a 3-1/2 week high. Thursday's stronger dollar weighed on metals prices. Also, Thursday's stock rebound curbed safe-haven demand for precious metals. Gold prices continue to be undercut by fund liquidation as long gold positions in ETFs fell to a 1-3/4 month low on Wednesday.
Precious metals on Thursday initially moved higher on worries about rising US deficits that boosted precious metals as a store of value after the House passed President Trump's tax and spending bill. Dovish comments Thursday from Fed Governor Waller also boosted precious metals when he said the Fed could cut interest rates in the second half of this year if tariff increases settle around 10%. Finally, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
16 minutes ago
- Globe and Mail
NOVAGOLD and Paulson Advisers Complete $1 Billion Acquisition of Barrick Mining's 50% Interest in Donlin Gold
Paulson Advisers acquires a 40% ownership interest in Donlin Gold NOVAGOLD increases ownership interest in Donlin Gold from 50% to 60% Financial public offering and concurrent private placement raised sufficient funding for NOVAGOLD's acquisition and for the Donlin Gold Feasibility Study update All amounts are in U.S. dollars unless otherwise stated VANCOUVER, British Columbia, June 03, 2025 (GLOBE NEWSWIRE) -- NOVAGOLD RESOURCES INC. ('NOVAGOLD') (NYSE American, TSX: NG) and Paulson Advisers LLC ('Paulson') are pleased to announce the successful closing of their previously disclosed acquisition of Barrick Mining Corporation's ("Barrick's") 50% interest in the Donlin Gold project, establishing new ownership of Donlin Gold LLC to advance the Donlin Gold project in Alaska. At closing, NOVAGOLD acquired an additional 10% in Donlin Gold LLC for $200 million — increasing its stake to 60% — while Paulson secured a 40% interest in Donlin Gold LLC for $800 million. NOVAGOLD and Paulson entered into a new limited liability company agreement governing Donlin Gold with equal governance rights. 'Today we completed the successful and strategic Donlin Gold transaction through a strong collaborative effort between NOVAGOLD, Paulson, and Barrick since announcing the transaction on April 22, 2025,' said Greg Lang, NOVAGOLD's President and CEO. 'This constitutes a truly transformational transaction and an exciting new chapter for Donlin Gold as we advance one of the best and most jurisdictionally attractive gold development projects in the world. We look forward to providing updates on the key milestones in the coming months, starting with our revamped and determined efforts regarding the Feasibility Study workstream.' As of March 1, 2025, pro forma the upsized public offering and private placement which closed on May 9, 2025, NOVAGOLD had $327M to fund the acquisition of the additional 10% stake in Donlin Gold LLC and the Company's share of ongoing activities at Donlin. NOVAGOLD has opted not to prepay the outstanding debt owed to Barrick in connection with the Donlin Gold project for $90 million upon closing, but it retains the option to prepay the outstanding debt for $100 million within 18 months from closing, when the option expires. If that option is not exercised, the debt, currently valued at $158.9 million as of June 3, 2025, will remain outstanding, substantially in accordance with its existing terms (U.S. prime plus 2% compounded semi-annually). In coordination with Paulson, a strategic review of the Donlin Gold 2025 budget ($43 million on a 100% basis) will be completed while advancing the following activities: Commencing the workstream to update the Feasibility Study 1, including assembling a specially dedicated team to advance these efforts; Executing the 2025 drill program focused on the conversion and expansion of reserves and resources, with both partners committed to exploring for new resources along strike and to depth in future campaigns; Advancing the technical work and engineering designs; Supporting state permitting efforts and maintaining existing federal and state permits in good standing, including government affairs engagement with federal and state representatives; and Collaborating on ongoing stakeholder outreach and investment initiatives in Alaska. About NOVAGOLD NOVAGOLD is a precious metals company focused on the development of the Donlin Gold project. Located in Alaska, one of the safest mining jurisdictions in the world, the Donlin Gold project is regarded as one of the largest, highest-grade, and most prospective known open-pit gold deposits in the world. About Paulson Paulson is a private global investment management advisory firm based in Palm Beach, Florida. NOVAGOLD Contacts: Mélanie Hennessey Vice President, Corporate Communications 604-669-6227 or 1-866-669-6227 Frank Gagnon Manager, Investor Relations 778-990-0299 or 1-866-669-6227 Paulson Contact: Michael McKeon mmckeon@ Cautionary Note Regarding Forward-Looking Statements This media release includes certain 'forward-looking information' and 'forward-looking statements' (collectively 'forward-looking statements') within the meaning of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include future-oriented financial information or financial outlook within the meaning of securities laws, including information regarding the anticipated benefits of the transaction with Paulson, NOVAGOLD's anticipated expenditures and anticipated plans for the new partnership and Donlin following the completion of the transaction, statements regarding the permitting, potential development, exploration, construction and operation of Donlin Gold and statements relating to NOVAGOLD's future operating and financial performance and production estimates. Such information is intended to assist readers in understanding NOVAGOLD's current expectations and plans relating to the future. Such information may not be appropriate for other purposes. Forward-looking statements are frequently, but not always, identified by words such as 'expects', 'continue', 'ongoing', 'anticipates', 'believes', 'intends', 'estimates', 'potential', 'possible', and similar expressions, or statements that events, conditions, or results 'will', 'may', 'could', 'would' or 'should' occur or be achieved. Forward-looking statements are necessarily based on several opinions, estimates and assumptions that management of NOVAGOLD considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, included herein are forward-looking statements. These forward-looking statements include statements regarding plans for and anticipated timing a new feasibility study on the Donlin Gold project; plans for and anticipated timing of a strategic review of Donlin Gold's 2025 budget our goals and planned activities for 2025; anticipated timing of milestone and project updates; ongoing support provided to key stakeholders including Native Corporation partners; Donlin Gold's continued support for the state and federal permitting process; sufficiency of working capital; the potential development and construction of the Donlin Gold project; the timing and ability for the Donlin Gold project to hit critical milestones; the ability for the Tier One gold development project to hit the anticipated projections; the sufficiency of funds to continue to advance development of Donlin Gold, including to a construction decision; perceived merit of properties; mineral reserve and mineral resource estimates; Donlin Gold's ability to secure the permits needed to construct and operate the Donlin Gold project in a timely manner, if at all; legal challenges to Donlin Gold's existing permits and the timing of decisions in those challenges; plans to continue to advance the Donlin Gold project safely, socially responsibly and to sustainably generate value for our stakeholders; continued cooperation between the owners of Donlin Gold LLC to advance the project; NOVAGOLD's ability to deliver on its strategy with the Donlin Gold project; the success of the strategic mine plan for the Donlin Gold project; the success of the Donlin Gold community relations plan; the anticipated outcome of exploration drilling at the Donlin Gold project and the timing thereof; the completion of test work and modeling and the timing thereof. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements are not historical facts but instead represent the expectations of NOVAGOLD management's estimates and projections regarding future events or circumstances on the date the statements are made. Important factors that could cause actual results to differ materially from expectations include failure to satisfy or waive the closing conditions to the transaction; the need to obtain additional permits and governmental approvals; the timing and likelihood of obtaining and maintaining permits necessary to construct and operate; the need for additional financing to complete an updated feasibility study and to explore and develop properties and availability of financing in the debt and capital markets; disease pandemics; uncertainties involved in the interpretation of drill results and geological tests and the estimation of reserves and resources; changes in mineral production performance, exploitation and exploration successes; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in the United States or Canada; the need for continued cooperation between the owners of Donlin Gold LLC to advance the project; the need for cooperation of government agencies and Native groups in the development and operation of properties; risks of construction and mining projects such as accidents, equipment breakdowns, bad weather, disease pandemics, non-compliance with environmental and permit requirements, unanticipated variation in geological structures, ore grades or recovery rates; unexpected cost increases, which could include significant increases in estimated capital and operating costs; fluctuations in metal prices and currency exchange rates; whether or when a positive construction decision will be made regarding the Donlin Gold project; and other risks and uncertainties disclosed in NOVAGOLD's most recent reports on Forms 10-K and 10-Q, particularly the 'Risk Factors' sections of those reports and other documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. Copies of these filings may be obtained by visiting NOVAGOLD's website at or the SEC's website at or on SEDAR+ at The forward-looking statements contained herein reflect the beliefs, opinions and projections of NOVAGOLD on the date the statements are made. NOVAGOLD assumes no obligation to
Globe and Mail
31 minutes ago
- Globe and Mail
Why Guardant Health Stock Surged Nearly 9% Higher Today
Precision oncology specialist Guardant Health (NASDAQ: GH) was something of a stock market star on Tuesday. On the back of very positive news in the regulatory sphere, the company's shares jumped almost 9% higher today. This made it quite the outperformer on the exchange, as the bellwether S&P 500 index's gain was a relatively modest 0.6%. A new designation This morning before market open, Guardant announced that the U.S. Food and Drug Administration (FDA) had granted the healthcare company's Shield multi-cancer detection (MCD) test its Breakthrough Device designation. This instantly confers a high status on Shield, as the FDA's designation is given only to a small clutch of medical devices that can either diagnose or treat a disease more effectively than other products. In Shield's case, it is quite a versatile diagnostic device that can screen for a wide range of cancers, including colorectal, lung, and ovarian. It is designed to evaluate people 45 years of age or older who are at a typical average risk for cancer. According to Guardant, Shield has 98.6% specificity and 75% sensitivity in detecting certain cancers. In its news release touting the FDA's move, Guardant quoted its co-CEO AmirAli Talasaz as saying that it "shows the promise of the Shield MCD test to detect multiple cancers at an early stage with just a single, routine blood draw." "We look forward to partnering with the agency and other stakeholders to bring this breakthrough to patients quickly," he added. Coming to market soon Another big plus of the Breakthrough Device designation is that it's part of an FDA initiative aimed at getting useful medical products to market faster. Talasaz and his team at Guardant might just get their wish with Shield before long. Should you invest $1,000 in Guardant Health right now? Before you buy stock in Guardant Health, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Guardant Health wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor 's total average return is987% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025
Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Musk calls Trump's big tax break bill a ‘disgusting abomination,' testing his influence over the GOP
WASHINGTON (AP) — Elon Musk blasted President Donald Trump's'big, beautiful bill' of tax breaks and spending cuts as a 'disgusting abomination' on Tuesday, testing the limits of his political influence as he targeted the centerpiece of Republicans' legislative agenda. The broadside, which Musk issued on his social media platform X, came just days after the president gave him a celebratory Oval Office farewell that marked the end of his work for the administration, where he spearheaded the Department of Government Efficiency. 'I'm sorry, but I just can't stand it anymore,' Musk posted on X. 'This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.' The legislation, which has passed the House and is currently under debate in the Senate, would curtail subsidies that benefit Tesla, Musk's electric automaker. The tech billionaire followed his criticism with a threat aimed at Republicans. 'In November next year, we fire all politicians who betrayed the American people,' he wrote in another X post. It's a sharp shift for Musk, the world's richest person who spent at least $250 million supporting Trump's campaign last year. He previously pledged to help defeat Republican lawmakers deemed insufficiently loyal to Trump, but now he's suggesting voting them out if they advance the president's legislative priority. However, it's unclear how Musk will follow through on his criticism. He recently said that he would spend 'a lot less' on political campaigns, though he left the door open to political involvement 'if I see a reason.' The tech titan's missives could cause headaches for Republicans on Capitol Hill, who face conflicting demands from Trump and their party's wealthiest benefactor. Alex Conant, a Republican strategist, said 'it's not helpful' to have Musk criticizing the legislation, but he doesn't expect lawmakers to side with Musk over Trump. 'Senate Republicans are not going to let the tax cuts expire,' Conant said. 'It just makes leadership's job that much harder to wrangle the holdouts.' Trump can change the outcome in Republican primaries with his endorsements; Musk doesn't wield that level of influence, Conant said. 'No matter what Elon Musk or anybody else says — and I don't want to diminish him because I don't think that's fair — it's still going to be second fiddle to President Trump,' said Republican West Virginia Sen. Shelley Moore Capito. Musk's business interests stand to take a hit if lawmakers approve Trump's bill, which would slash funding for electric vehicles and related technologies. Musk is the chief executive of Tesla, the nation's largest electric vehicle manufacturer, and SpaceX, which has massive defense contracts. Last month, Musk said he was 'disappointed' by the spending bill, a much milder criticism than the broadside he leveled on Tuesday. The budget package seeks to extend tax cuts approved in 2017, during Trump's first term at the White House, and add new ones he campaigned on. It also includes a massive build-up of $350 billion for border security, deportations and national security. To defray some of the lost tax revenue to the government and limit piling onto the nation's $36 trillion debt load, Republicans want to reduce federal spending by imposing work requirements for some Americans who rely on government safety net services. Musk's post threw another hurdle in front of Senate Majority Leader John Thune's already complex task to pass a bill in time for Trump to achieve his goal of signing it by July 4. The South Dakota Republican has few votes to spare in the GOP's slim 53-seat majority. Two of the Senate's most fiscally hawkish Republicans quickly backed Musk. 'We can and must do better,' Kentucky Sen. Rand Paul wrote on X. Utah Sen. Mike Lee said 'federal spending has become excessive,' adding that it causes inflation and 'weaponizes government.' Still, Trump enjoys fierce loyalty among the GOP base, and in the end, his opinion may be the only one that matters. White House press secretary Karoline Leavitt played down Musk's criticism. 'The president already knows where Elon Musk stood on this bill,' Leavitt said, and Musk's post 'doesn't change the president's opinion.' The tension in the GOP delighted Democrats, who found themselves in the unlikely position of siding with Musk. Democrats are waging an all-out political assault on GOP proposals to cut Medicaid, food stamps and green energy investments to help pay for more than $4.5 trillion in tax cuts — with many lawmakers being hammered at boisterous town halls back home. 'We're in complete agreement,' House Minority Leader Hakeem Jeffries said of Musk. The New York Democratic lawmaker stood alongside a poster-sized printout of Musk's post during a Capitol news conference. The last time Musk weighed in significantly on legislation, the scenario was far different. His power was ascendant after the election, with Trump joining him for a rocket test in Texas and appointing him to spearhead the Department of Government Efficiency. During the transition period, Musk started whipping up opposition to legislation that would prevent a government shutdown, posting about it repeatedly on X, his social media platform. Trump soon weighed in, encouraging Republicans to back out of a bipartisan deal. Lawmakers eventually patched together a new agreement. ___ Cooper reported from Phoenix. Associated Press writers Joey Capelletti and Mary Claire Jalonick in Washington contributed reporting.
