Dollar holds steady after US, China reach framework deal to ease export curbs
The dollar remained stable against major currencies on Wednesday. This followed an agreement between the United States and China on a trade framework. The deal aims to resolve the trade war. Investors are watching for details. They hope it will rebuild trust between President Xi and President Trump. The market also awaits U.S. inflation data and UK's public spending plans.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
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 labour market.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India Today
33 minutes ago
- India Today
Might go up: Trump signals hike in auto tariffs for more US production
U.S. President Donald Trump on Thursday warned he may soon hike auto tariffs, arguing that could prod carmakers to speed U.S. investments."I might go up with that tariff in the not-too-distant future," Trump said at a White House event. "The higher you go, the more likely it is they will build a plant here."Automakers have been pressing the White House to reduce the 25% tariffs Trump imposed on autos. The Detroit Three automakers have criticised a deal that would cut tariffs on British car imports but not on Canadian or Mexican Trump cited a series of recent investment announcements, including GM saying this week that it plans to invest $4 billion in three U.S. plants and move some SUV production from Mexico. He also noted a $21 billion Hyundai investment announced in March including a new U.S. steel plant."They wouldn't have invested 10 cents if we didn't have tariffs, including for manufacturing American steel, which is doing great," Trump said last month that cars assembled in Mexico and exported to the U.S. will face an average tariff of 15%, not 25% because Washington is giving automakers reductions for the value of U.S. are facing increasing cost pressures stemming from tariffs. In recent weeks, Ford Motor F.N and Subaru of America 7270.T have hiked prices on some models due to higher costs from Trump's tariffs. In May, Ford estimated tariffs would cost it about $1.5 billion in adjusted said last month it had a current tariff exposure of between $4 billion and $5 billion, including about $2 billion on the more affordable vehicles GM imports from South Korea, where it makes entry-level Chevrolet and Buick InMust Watch
Economic Times
an hour ago
- Economic Times
Hyphenating US-Pak: Doing business with gunmen
Howdy, phenomenal pardners! Michael Kurilla (left) & Asif Munir, Florida, 2023 The Trump regime's reported invitation to Pakistan Army chief Asim Munir to attend the 250th US Army Day celebrations in Washington tomorrow has stirred various vectors of speculation. Chief among them: Potential reset in US-Pakistan relations. Pakistan's prospective utility within an emergent Trump doctrine that views bilateral ties primarily through an economic lens. Revival of a counterterrorism partnership between Islamabad/Rawalpindi and Washington. Implications of such a warming of US-Pakistan ties on US-India relations. In New Delhi, this apparent shift in Washington's posture has come as a surprise. What is even more startling is the timing - coming on the heels of India's retaliation against Pakistan for its involvement in the Pahalgam terrorist attacks on civilians. A significant part of Trump's appeal among Indians, both in India and the diaspora, stemmed from his tough stance on terrorism. During Trump 1.0, he publicly called out Pakistan's duplicity in his very first tweet of 2018, accusing it of 'lies and deceit' while receiving billions in US aid. He subsequently cut $300 mn in aid to Pakistan, a move that built on the Obama administration's earlier decision to withhold one-third of all military assistance to the country. During Trump 2.0, consistent with his recalibrated approach toward various global actors, the US president has markedly diverged from his earlier stance, Pakistan being no exception. In February, the Trump regime departed from its broader aid-cutting policy to authorise $397 mn in security assistance to Pakistan. This was specifically aimed at supporting a US-backed programme for maintenance and technical support of Pakistan's F-16 fighter the assistance explicitly stated that it was not to be used for operations against India, reopening of funding channels to Pakistan signalled a broader trend of policy reversal. In March, Trump publicly thanked Pakistan for its assistance in the arrest of Mohammad Sharifullah, a suspect linked to multiple terrorist attacks, including the 2021 Abbey Gate bombing in recently, Trump's consistent attempts to place Pakistan on equal footing with India, particularly following the India-Pak military escalation in May, appear driven by strategic reinforcing this shift, US Centcom chief Michael Kurilla referred to Pakistan as a 'phenomenal partner' in counterterrorism efforts. Similarly, Paul Kapur, Trump's incoming assistant secretary of state for South and Central Asian affairs, affirmed that the US would 'pursue security cooperation where it is beneficial to US interests while seeking opportunities for bilateral collaboration in trade and investment'. Together, these moves reflect a deliberate and coordinated strategy for renewed strategic engagement with apparent rapprochement between the US and Pakistan may be driven largely by Trump's personal inclinations, and a possible desire to secure future economic deals. For Pakistan, warming ties with Washington represent a strategic gain, however temporary. Any signs of improving relations between Islamabad/Rawalpindi and Washington stand in sharp political contrast to the stance of former PM Imran Khan and his supporters in Pakistan Tehreek-e-Insaf (PTI).Khan had accused the US of orchestrating the fall of his government, and maintained that he would never have agreed to American demands for military bases in his country. If PTI continues to remain a significant political force, any future US requests for enhanced military presence - even under the guise of counterterrorism - are likely to face resistance. Conversely, if Trump intensifies efforts to strike an economic deal with Pakistan, the resulting political reverberations within the country could become even more tough posture during his first term - marked by launching a trade war with China, pursuing a 'maximum pressure' strategy against Iran culminating in the killing of Iranian general Qasem Soleimani, and publicly calling out countries like Pakistan for sponsoring terrorism - is now giving way to a policy of modus vivendi, driven by an outsized prioritisation of US interests, particularly economic US-China economic deal reportedly 'finalised' on June 11 underscores this clear shift in US diplomacy - one that increasingly sidelines concerns of Washington's allies, partners and friends. While this approach may serve immediate US interests, especially in economic terms, it risks prompting a strategic recalibration by other nations in how they engage with the the shadow of recent military escalation between India and Pakistan, Pakistan's detente with the US may present an opportunity for Trump. But the strain this reset places on India-US relations could prove detrimental to both countries in the long run. The divergence between New Delhi and Washington is now most pronounced on the issue of Pakistan and, more broadly, on India has strongly reaffirmed its zero-tolerance stance against terrorism following the Pahalgam attack, the Trump regime appears increasingly willing to engage Pakistan as a counterterrorism partner. In doing so, Trump seems to be prioritising unilateral US interests over shared strategic concerns that have long underpinned the India-US partnership. Unlike his first term, when Trump's South Asia policy broadly aligned with the US-India strategic convergence, his bilateral bets in his second gig risk further destabilising an already fragile region. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. How a nudge from Cyrus Mistry helped TCS unlock a USD1 billion opportunity Explainer: The RBI's LAF corridor and its role in rate transmission Is Zomato under siege? Quick commerce may be the next telecom Operation Sindoor, Turkey, Bangladesh played out as India hosted global airlines after 42 years Coal on one hand and green on the other; this company balances both Stock Radar: Bandhan Bank stocks break out from 1-month consolidation; what should traders do? Check target & stop loss Combination of strong brand & higher margins equals long-term investment: 5 stocks with an upside potential of up to 23% Two Trades for Today: A PSU energy major for 7.5% rise, a large-cap refinery stock for close to 6% upmove These mid-cap stocks with 'Strong Buy' & 'Buy' recos can rally over 25%, according to analysts
Mint
an hour ago
- Mint
Donald Trump to set unilateral tariff rates for trading partners within two weeks, ‘Can take it or leave it'
United States President Donald Trump on June 11 said he intends to send letters to trading partners within the next week or two setting unilateral tariff rates, according to a Bloomberg report. The move will come ahead of a July 9 deadline to reimpose higher duties on severeal countries, it added. Speaking to reporters, Donald Trump said, 'At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it.' When reporters questioned if countries would get more time to make trade deals before the higher tariffs start, the US president said he would be open to it, but 'But I don't think we're gonna have that necessity'. While Donald Trump had initially said he would engage in talks with each country, the US strategy has since moved towards prioritising key economic partners with the administration acknowledging that it lacks the capacity to negotiate dozens of individual deals, the report said. While deals with China and the United Kingdom have had extensive discussions and 'near' completion, Trump's team is working to secure bilateral deals with India, Japan, South Korea and the European Union. Also speaking to reporters on June 11, US Commerce Secretary Howard Lutnick said that a deal with the EU is likely to be among the last to be completed, expressing frustration with conducting talks with a 27-nation bloc. At present it is unclear if Donald Trump will follow through with his intent as he has often set two-week deadlines only for dates to be postponed or for the matter to be dropped, the report noted. Notably, on May 29, a reporter invited Donald Trump ire by asking his opinion on Wall Street dubbing his tariffs plan as TACO i.e. Trump Always Chickens Out — mocking the US president's frequent tariff impositions and subsequent reductions, followed by waivers. A visibly offended Donald Trump went on a defensive rant: 'Don't ever say what you said. To me, that's the nastiest question.' In April, the US president announced higher tariffs for dozens of trading partners, and then paused action for 90 days. Then, on May 16, Donald Trump said he would be setting tariff rates for US trading partners 'over the next two to three weeks'. Till date (June 11 last), the only trade framework the US has reached is with the UK, along with a shaky tariff truce with China. First coined by The Financial Times' Robert Armstrong, the term 'TACO' has been picked up for use by Wall Street traders, who see large sell-offs each time Donald Trump's tariffs are announced, followed by recovery when the demand is cut down or removed. (With inputs from Bloomberg)
