China warns of legal action against anyone applying US restrictions on use of Huawei AI chips
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CNA
2 hours ago
- CNA
Dollar eases as data keep September rate cut on track; eyes on Trump-Putin meeting
NEW YORK :The dollar slipped on Friday as a data-heavy week wound down, keeping the case for a September Federal Reserve interest rate cut intact, while traders awaited talks in Alaska between U.S. President Donald Trump and Russian leader Vladimir Putin regarding Ukraine. The dollar, which had jumped on Thursday as data showed U.S. producer prices increased more than expected in July, gave up most of those gains on Friday, and was set to finish the week 0.4 per cent lower against a basket of currencies. "The PPI figure yesterday was a shock, but there is still little concrete evidence for a tariff-driven spike in inflation," Kyle Chapman, forex markets analyst at Ballinger & Co in London, said. "With markets staying firm on their bets for a September cut and the focus now shifting to Alaska, the dollar is handing back its gains this morning," Chapman added. Money markets reflect a 93 per cent chance of a 25-basis-point Fed rate cut in September, according to CME FedWatch. A Fed interest rate cut in September, the first this year, followed perhaps by another before year-end, remains the base forecast for most economists polled by Reuters amid rising concerns about the health of the world's biggest economy. Chicago Federal Reserve Bank President Austan Goolsbee on Friday said the latest reports this week showing a rise in services inflation are a source of "unease" given what he sees as the stagflationary impulse from tariffs on the economy. On Friday, investors were also watching to see if the Trump-Putin summit made any progress towards a ceasefire in Ukraine. "While anything could happen at the meeting between Trump and Putin, I think expectations are low for progress towards a lasting ceasefire and that tilts the risks towards a softer dollar if the market is pleasantly surprised," Ballinger's Chapman said. Most analysts expect Europe's single currency to benefit from any ceasefire deal in Ukraine. The euro was 0.5 per cent higher at $1.1702 versus the dollar. The dollar found little support on Friday from data that showed U.S. import prices rebounded in July, boosted by higher costs for consumer goods. Separately, U.S. retail sales increased solidly in July, boosted by strong demand for motor vehicles as well as promotions by Amazon and Walmart. Markets also await next week's Jackson Hole symposium for clues on the Fed's next move. Signs of weakness in the U.S. labour market combined with any inflation from trade tariffs could present a dilemma for the Fed's rate cut trajectory. "While there are more Fed officials talking about resuming rate cuts, (Fed Chair Jerome) Powell may try to temper expectations about when and how much they'll cut," Brian Jacobsen, chief economist at Annex Wealth Management, said in a note. Against the yen, the dollar was 0.4 per cent lower at 147.23 yen, following the release of surprisingly strong Japanese growth data, which showed export volumes held up well against new U.S. tariffs. U.S. Treasury Secretary Scott Bessent's remarks earlier this week that the Bank of Japan could be "behind the curve" in dealing with the risk of inflation proved to be another tailwind for the yen this week. Sterling rose against a weakening dollar on Friday and was set to end the week higher after upbeat economic data and a hawkish rate cut by the Bank of England. The pound was last up 0.2 per cent at $1.35520, taking its gains for the week to 0.7 per cent. Elsewhere, bitcoin was about unchanged on the day at $117,126. Bitcoin had at one point touched a record high on Thursday as increasing expectations for easier monetary policy from the Fed added to optimism stemming from a pro-crypto regulatory environment in Washington.
CNA
2 hours ago
- CNA
US Senator Hawley launches probe into Meta AI policies
U.S. Senator Josh Hawley launched a probe into Facebook parent Meta Platforms' artificial intelligence policies on Friday, demanding documents on rules that had allowed its artificial intelligence chatbots to 'engage a child in conversations that are romantic or sensual.' Both Democrats and Republicans in Congress have expressed alarm over the rules outlined in an internal Meta document first reported by Reuters on Thursday. Hawley, a Republican from Missouri, chairs the Senate subcommittee on crime and counterterrorism, which will investigate "whether Meta's generative-AI products enable exploitation, deception, or other criminal harms to children, and whether Meta misled the public or regulators about its safeguards," he said in a letter to Meta CEO Mark Zuckerberg. "We intend to learn who approved these policies, how long they were in effect, and what Meta has done to stop this conduct going forward," Hawley said. Meta declined to comment on Hawley's letter on Friday. The company said previously that "the examples and notes in question were and are erroneous and inconsistent with our policies, and have been removed.' In addition to documents outlining those changes and who authorized them, Hawley sought earlier drafts of the policies along with internal risk reports, including on minors and in-person meetups. Reuters reported on Thursday about a retired man who died while traveling to New York on the invitation of a Meta chatbot. Meta must also disclose what it has told regulators about its generative AI protections for young users or limits on medical advice, according to Hawley's letter. Hawley has often criticized Big Tech. He held a hearing in April on Meta's alleged attempts to gain access to the Chinese market which were referenced in a book by former Facebook executive Sarah Wynn-Williams.
CNA
2 hours ago
- CNA
Democrats decry move by Pentagon to pause $800 million in nearly done software projects
WASHINGTON :Democrats took aim at the Trump administration after Reuters reported on Wednesday that the Navy and Air Force were poised to cancel nearly completed software projects worth over $800 million. The reason for the move was an effort by some officials at the services to steer new projects to companies like Salesforce and Palantir, in what could amount to a costly do-over. 'The Pentagon has yet to show that it had a good reason for halting these contracts in the last inning and scrapping work American tax dollars have already paid for," Democratic Senator Tim Kaine said in an emailed statement. "If it can't show its homework, then this announcement - just days after Palantir's CEO spoke at Mike Johnson's Wyoming donor retreat - reeks of corruption.' Punchbowl reported earlier this month that Palantir CEO Alex Karp planned to address Republican House Speaker Mike Johnson's annual big-donor retreat in Jackson Hole, Wyoming. The Pentagon and Air Force did not immediately respond to requests for comment. The Navy declined to comment. Trump officials say the administration is striving to make the contracting process more efficient. Trump took office vowing to rid the government of what he calls waste and abuse. The website of the Department of Government Efficiency, the agency he created to spearhead those efforts, lists over $14 billion in Defense Department contracts it claims to have canceled. But seven months into his presidency, some of his own actions have complicated DOGE's work, from firing the Pentagon's inspector general to issuing an executive order prioritizing speed and risk-taking in defense acquisitions. 'If you're serious about cracking down on waste, fraud, and abuse, the last thing you'd do is cancel $800 million in projects that are nearly ready to roll out just to turn around and steer the same work to corporations of your choosing," said Democratic Representative Maggie Goodlander, who sits on the House Armed Services Committee and served as an intelligence officer in the United States Navy Reserve for over a decade. "This maneuver is an insult to taxpayers and servicemembers across America," she added. Salud Carbajal, another House Democrat who sits on the House Armed Services Committee, said the behavior was part of a pattern of waste at the Pentagon under Trump. 'I understand that our military's acquisition and procurement processes aren't flawless, but this administration has repeatedly shown a blatant disregard for the responsible use of taxpayer dollars,' said Carbajal. 'From lavish military parades to unnecessary troop deployments in Los Angeles, President Trump has used our armed forces to inflate his own ego and enrich his allies," he said, adding that he would continue to call out mismanagement and press for accountability.
