US-Vietnam trade deal marks shift in Washington's strategy in Southeast Asia: Analyst
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CNA
an hour ago
- CNA
Dollar rises after Trump announces Japan, South Korea tariffs
NEW YORK :The dollar rose sharply against other major currencies on Monday, after U.S. President Donald Trump announced new tariffs set to go into effect August 1 for a spate of countries including Japan and South Korea. Trump posted letters to the leaders of several countries on his social media platform, saying that he would impose tariffs of 25 per cent on Japan and South Korea. He also sent letters to the leaders of Malaysia, Kazakhstan, Myanmar, South Africa and Laos, all of which outlined tariffs close to the levels previously announced for each country in April. The dollar's rise was most pronounced against the yen, and was last up 1.09 per cent at 146.130. The dollar was up 0.38 per cent to 0.798 against the Swiss franc on Monday. "There were some country-specific things that were already putting some of these currencies on the back foot," said Brad Bechtel, global head of FX at Jefferies. "But clearly, the news this morning out of the U.S. with Trump and the tariffs is definitely hitting currencies other than the dollar, for a change." The euro slipped 0.57 per cent to $1.172 having rallied over 13 per cent so far this year. Investors are concerned that Brussels might not be able to secure deals with Washington ahead of the deadline as progress on agreements with the European Union has been slow, despite multiple rounds of negotiations. Most U.S. trade partners face the prospect of steeper duties at the end of the 90-day moratorium on U.S. President Donald Trump's "Liberation Day" reciprocal tariffs on Wednesday. Trump has also threatened an additional 10 per cent tariff on nations aligning with what he deemed to be the "anti-American" policies of the BRICS emerging economies. The dollar index, which measures the currency against six major counterparts, rose 0.517 per cent to 97.467, reaching a one-week high. The index extended gains from last week when data reflecting labour market resilience pushed back expectations for imminent monetary policy easing by the Federal Reserve. Still, the index is close to a 3-1/2-year trough and has declined 10 per cent so far this year as investors questioned the safe-haven status of the U.S. currency and reassessed earlier expectations that the U.S. could be spared in the event of a global economic slowdown. Sterling weakened 0.26 per cent to $1.362, but stayed near its strongest level since October 2021. Currencies positively correlated to risk appetite, such as the Aussie dollar and the New Zealand dollar lost 0.79 per cent and 0.74 per cent, respectively ahead of monetary policy decisions in both countries in the coming two days. The Reserve Bank of Australia is widely expected to cut the cash rate by another quarter point on Tuesday, while New Zealand's central bank is predicted to hold rates steady on Wednesday. U.S. policy uncertainty weighing on the dollar "may not be as potent as in early April, but we think this correlation still matters," Paul Mackel, global head of FX research at HSBC said.
CNA
2 hours ago
- CNA
Oil prices up; strong demand outweighs surprisingly big OPEC+ output hike
HOUSTON :Oil prices rose nearly 2 per cent on Monday as signs of strong demand more than offset the impact of a higher-than-expected OPEC+ output hike for August and fresh concerns about the potential impact of U.S. tariffs. Brent crude futures settled up $1.28, or 1.9 per cent, at $69.58. U.S. West Texas Intermediate crude settled up 93 cents or 1.4 per cent, at $67.93. Early in the session, Brent had fallen as low as $67.22 and WTI's session low was $65.40. "The supply picture definitely looks to be elevating, however, the stronger demand is remaining above expectations as well," said Dennis Kissler, senior vice president of trading at BOK Financial. Travel industry statistics released last week showed that a record number of Americans had been set to travel for the Fourth of July holiday by road and air. On Saturday, the Organization of the Petroleum Exporting Countries and allies in OPEC+ agreed to raise production by 548,000 barrels per day in August, exceeding the 411,000-bpd hikes they made for the prior three months. The OPEC+ decision will bring nearly 80 per cent of the 2.2 million-bpd voluntary cuts from eight OPEC producers back into the market, RBC Capital analysts, led by Helima Croft, said in a note. However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, analysts said. In a show of confidence about oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia. Goldman analysts expect OPEC+ to announce a final 550,000-bpd increase for September at the next meeting on August 3. Oil had also come under pressure as U.S. officials flagged a delay regarding when tariffs would begin, but failed to provide details on changes to the rates that will be imposed. Investors are worried that higher tariffs could slow economic activity and oil demand. The U.S. will make several trade announcements in the next 48 hours, Treasury Secretary Scott Bessent said on Monday, adding his inbox was full of last-ditch offers from countries to clinch a tariff deal before a July 9 deadline. "Although U.S. trade policy is still unfolding, the U.S. is extending deadlines and backing away from punitive tariffs, helping to lift some of the demand gloom in place since April," said Jeffrey McGee, managing director of advisory firm Makai Marine Advisors. Meanwhile, Yemen's Iran-aligned Houthis said on Monday a cargo ship they struck with gunfire, rockets and explosive-laden remote-controlled boats had sunk in the Red Sea, after their first known attack on the high seas this year. Israeli Prime Minister Benjamin Netanyahu was due to meet with Trump at the White House on Monday, while Israeli officials hold indirect talks with Hamas aimed at reaching a U.S.-brokered Gaza ceasefire and hostage-release deal. Iranian President Masoud Pezeshkian said he believes Iran can resolve its differences with the U.S. through dialogue, but trust would be an issue after U.S. and Israeli attacks on his country, according to an interview released on Monday.
CNA
2 hours ago
- CNA
Oil rises as strong demand outweighs larger-than-expected OPEC+ output hike
HOUSTON : Oil rose more than 1 per cent on Monday on signs of strong demand, shrugging off the impact of a higher-than-expected OPEC+ output hike for August as well as concerns about the potential impact of U.S. tariffs. Brent crude futures rose 79 cents, or 1.2 per cent, to $69.08 by 02:05 p.m. ET (18:05 GMT). U.S. West Texas Intermediate crude was at $67.29, up 29 cents, or 0.4 per cent. The benchmarks had fallen to $67.22 and $65.40, respectively, earlier in the session. "The supply picture definitely looks to be elevating, however, the stronger demand is remaining above expectations as well," Dennis Kissler, senior vice president of trading at BOK Financial. A record number of Americans had been set to travel for the Fourth of July holiday by road and air, travel industry statistics showed. The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, agreed on Saturday to raise production by 548,000 barrels per day in August, more than the 411,000-bpd hikes they made for the earlier three months. The OPEC+ decision will bring nearly 80 per cent of the 2.2 million-bpd voluntary cuts from eight OPEC producers back into the market, RBC Capital analysts, led by Helima Croft, said in a note. However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, analysts said. In a show of confidence about oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia. Goldman analysts expect OPEC+ to announce a final 550,000-bpd increase for September at the next meeting on August 3. Oil had also come under pressure as U.S. officials flagged a delay regarding when tariffs would begin, but failed to provide details on changes to the rates that will be imposed. Investors are worried that higher tariffs could slow economic activity and oil demand. The United States will make several trade announcements in the next 48 hours, Treasury Secretary Scott Bessent said on Monday, adding that his inbox was full of last-ditch offers from countries to clinch a tariff deal before a July 9 deadline. "Although US trade policy is still unfolding, the U.S. is extending deadlines and backing away from punitive tariffs, helping to lift some of the demand gloom in place since April," said Jeffrey McGee, managing director of advisory firm Makai Marine Advisors. Meanwhile, geopolitical uncertainties continued. Yemen's Iran-aligned Houthis said on Monday that a cargo ship they struck with gunfire, rockets and explosive-laden remote-controlled boats had sunk in the Red Sea, after their first known attack on the high seas this year. Israeli Prime Minister Benjamin Netanyahu is due to meet with Trump at the White House on Monday, while Israeli officials hold indirect talks with Hamas aimed at reaching a U.S.-brokered Gaza ceasefire and hostage-release deal. Iranian President Masoud Pezeshkian said he believes Iran can resolve its differences with the United States through dialogue, but trust would be an issue after U.S. and Israeli attacks on his country, according to an interview released on Monday.
