Dollar strong as Trump imposes new tariff rates; yen slide spurs government warning
The dollar also gained on non-tariff catalysts, with the yen touching a four-month low, extending a steep decline from Thursday after the Bank of Japan signalled it was in no hurry to resume interest rate hikes.
That prompted Japanese Finance Minister Katsunobu Kato to say on Friday that officials are "alarmed" by currency moves. The yen last changed hands at 150.46 per dollar after earlier dipping to 150.915 per dollar, its weakest since March 28.
The U.S. dollar index - which measures the currency against a basket of six major peers including the euro, yen, Swiss franc and Canada's dollar - is on course to rise 2.4 per cent this week, its best weekly performance since a 3.1 per cent rally in September of 2022.
On Friday, it ticked up 0.1 per cent to 100.14, its highest since May 29.
Some countries fared much worse than others in tariff rates, hurting their currencies.
Canada received a 35 per cent levy instead of an earlier threatened 25 per cent, briefly pushing the loonie down 0.12 per cent to C$1.3872, its lowest since May 22 versus its U.S. peer.
The Swiss franc eased as much as 0.26 per cent to 0.8120 per dollar after Trump set a 39 per cent duty on Swiss imports, up from the 31 per cent he previously mooted.
Asian emerging markets got swept up in the selloff as the tariff fallout rippled through the region. The Philippine peso slumped to its weakest level in six months, while Taiwan's dollar hit its lowest since early June. South Korea's won sank to levels last seen in mid-May.
The euro remained pinned near an almost two-month low around $1.1428, as it continues to be weighed down by what markets see as a lopsided trade agreement with Washington. That wasn't far from Wednesday's low of $1.1401, a level not seen since June 10.
"In the short-term, you can make the case for more dollar strength," said Mike Houlahan, director at Electus Financial in Auckland. "The lion's share of the tariff news has washed through."
"The big move of the week has really been the euro getting rerated downwards," he said. "The net result would be the EU-U.S. trade deal is a further headwind for the euro."
The EU's framework trade agreement with the U.S., struck on Sunday, was quickly criticized by French leaders and the German head of the European Parliament's trade committee as being unfair for Europe.
PAYROLL DATA TO COME
The U.S. dollar stayed strong even though Trump continued his attacks on Federal Reserve Chair Jerome Powell overnight, calling him a "terrible" Fed Chair and calling his own decision to appoint Powell to the position a "mistake".
Trump's repeated threats to fire Powell and calls for the Fed to drastically cut rates have put the central bank's independence in question, hurting the dollar in recent months.
The Fed shrugged off that pressure on Wednesday by holding policy steady, citing "somewhat elevated" inflation and a "solid" labour market.
That view of employment will be tested later in the day with the release of the closely watched monthly payrolls data.
Economists forecast that employment growth dropped to 110,000 new jobs in July from 147,000 new jobs the previous month, a notable slowdown but one that is not expected to be particularly worrying.
"Data-wise, the U.S. looks resilient," said Shoki Omori, chief desk strategist at Mizuho Securities.
"If the U.S. economy is already operating above potential, that bump can translate into a slightly higher neutral rate of interest, which is supportive for front-end bond yields and therefore the U.S. dollar," he said.
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CNA
28 minutes ago
- CNA
Diners welcome colour-coded labels at nasi padang, economy rice stalls but call for clearer prices
SINGAPORE: When part-time driver Yam Sok Chi visited Hjh Maimunah's outlet at Parkway Parade last week, she noticed something new – each dish was labelled with a colour code indicating its price. 'This is a very clear picture,' said the 70-year-old, who dines at the Kopitiam outlet two to three times a week. 'Nothing better than to look at the price and order according to the price that you can afford.' The colour-coded labels were recently introduced at the nasi padang chain's Parkway Parade outlet and will soon be rolled out at all nine of its mini outlets, the Consumers Association of Singapore (CASE) said in a media release in late July. This follows a similar collaboration between CASE and Koufu in March, with colour-coded price labels to be implemented at 77 economy rice stalls by the end of the year. At Koufu, labels categorise dishes such as seafood (S$2.50), meat (S$1.50) and vegetables (S$1), while premium items are individually priced. Hjh Maimunah's dishes are colour-coded with prices that range from S$1.50 to S$4.50. Speciality items, such as tahu telur and ayam bakar, have grey tags, and customers will have to ask staff for prices. CASE president Melvin Yong said the introduction of price labels aims to improve price transparency and help customers make informed choices before they order. Diners have often expressed frustration over unclear pricing at such stalls. Dr Teo Kay Key, a research fellow at the Institute of Policy Studies, said customers rarely calculate total costs while ordering. 'So sometimes if the total price they have to pay is not within expectations, then it can lead to some contention,' she said. With colour codes, stalls can avoid disputes by showing that they are not charging a random price, she added. ROOM FOR IMPROVEMENT When CNA visited Hjh Maimunah's Parkway Parade outlet and the economy rice stall at Koufu at Plantation Plaza last week, most of the 14 diners interviewed supported the initiative. At Plantation Plaza, a 23-year-old fresh graduate who gave her name as Lynsie said she checks the colour codes when she wants to save money. 'Sometimes if I'm just very hungry, I just want to eat what I want to eat regardless of the price, I don't care about the colour so much,' she added. Production operator Mdm Toh, 60, did not notice the labels but said the idea was 'not bad'. 'I'm old, I don't know. I just see what I want, then order,' she said in Mandarin. She spent S$4.70 on her meal. Mr Khor Jun Han, 25, who oversees operations at Hong Le Mixed Veg Rice stall at Plantation Plaza's Koufu, said feedback has been positive. 'Customers say prices are more transparent. Sometimes when they come, they have a budget in mind,' he said in Mandarin. He explained that some premium dishes cannot have a fixed price point because ingredient costs can vary. Still, some felt the system could be clearer. At Parkway Parade, housewife Daria Wati said she only noticed a small A5-sized price chart at the cashier after picking her food. 'Because at first we don't know, then we go to the cashier, then we see it's like (this price),' said the 49-year-old. A diner who gave his name as Mr Ching questioned why the actual prices could not be shown directly on dishes so that customers would not have to refer to a price list. 'If you put the price there, easier what,' said the 55-year-old logistics manager, adding that he had not even noticed the colour-coded tags at Hjh Maimunah. WHY NOT LABEL BY PRICE? Ms Maria Didih, Hjh Maimunah's operations director, told CNA that labelling each of the outlet's 50-plus dishes individually would confuse customers. She added that dishes may have different prices for larger portions or takeaway orders. 'It's a bit hard for us, nasi padang, because there are a lot of prices. The best is actually for us, for our mini outlets, at least we put the per portion price in terms of colour code,' she said. Items tagged with grey "ask the server" tags, such as asam pedas fish roe, are seasonal and typically priced above regular tiers, making fixed pricing difficult, she added. Hjh Maimunah plans to gather feedback from the Parkway Parade outlet before expanding the initiative to its other mini branches. Its restaurants in Joo Chiat and Jalan Pisang, which offer more than 60 dishes, may adopt the system later. Other economy rice and nasi padang businesses CNA spoke to expressed concerns about adopting a similar system. Mr Terry Soh, who works at an economy rice stall in a food court in Katong, said he has too many variations of dishes to categorise them simply as "meat" or "vegetables" as Koufu stalls do. 'Customers may also get confused. So we don't use colour codes, we just communicate the prices verbally,' he said in Mandarin. He also raised concerns about hygiene and practicality in labelling each dish. Mr Mohamad Ariff Mohamad Zin, executive chef of nasi padang chain Rumah Makan Minang, said the colour-coded system is 'a good idea' for hawker-style setups but will not be adopted at his restaurants. His team instead provides menus with price ranges and breakdowns on receipts. He added that restaurant diners value ambience, while hawker customers may want quicker service – something colour coding could support. EFFECTIVENESS OF COLOUR-CODING Associate Professor Lau Kong Cheen, head of the marketing programme at Singapore University of Social Sciences, said that colour codes work only if pricing charts are clearly visiable to customers before they make their selection. 'Mistakes that some stalls commit are that they display this at the cashier counter after the customers have selected their food, not knowing the price that each colour code represents ... that defeats the purpose,' he said. Although labelling every item with a price would be ideal, he noted that it may be impractical and unhygienic. Inked tags are exposed to oil and water, and prices can change frequently. 'Thus far, colour-coded tags tend to be most feasible, safe and cost-effective to implement,' he said. Associate Professor Walter Theseira, a labour economist at the same university, added that the overall layout and number of colour codes also impact the system's effectiveness. 'I still think it would be difficult for an occasional customer to understand the system, particularly since there are quite a few price grades offered,' he said. Ultimately, as pricing displays are not regulated, he said only voluntary efforts from stallholders – such as those by Hjh Maimunah – can improve market practices.
CNA
3 hours ago
- CNA
US dollar gains in consolidation move after Fed turmoil, Trump's shake-up
NEW YORK :The U.S. dollar slightly recovered on Monday, consolidating recent moves, after Friday's trio of market-moving events that showcased the fragility of the greenback: a dismal U.S. jobs report, the resignation of a Federal Reserve Governor, and President Donald Trump's firing of a top statistics official. Those developments battered the currency and prompted investors to ramp up bets of imminent Fed rate cuts. But the dollar's bounce on Monday could be short-lived, analysts said, and the broader downtrend could re-emerge given U.S. policymaking uncertainty and a U.S. economy that is finally showing cracks. Data on Friday showed U.S. employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labour market conditions. "The U.S. seems to be ... experiencing a slowdown across industries that are doubting the benefits to arrive from deterring overseas production and purchasing," said Juan Perez, director of trading at Monex USA in Washington. "The world is not necessarily experiencing much optimism even as economic indicators here help in suggesting that aid will come from the Fed via rate cuts," he added. In afternoon trading, the dollar rose against the euro, Swiss franc, and the commodity-linked currencies such as the Australian and New Zealand dollars. The euro dipped 0.1 per cent against the U.S. unit to $1.1576, while the dollar rose 0.5 per cent against the Swiss franc to $0.8078. The drop in the Swiss currency was not a surprise after Trump hit Switzerland with some of the highest tariffs as part of the White House's global trade reset. The Aussie and New Zealand dollars also declined on Monday versus the greenback, falling 0.2 per cent to US$0.6463 and down 0.3 per cent at US$0.5904. Against the Swiss franc, the dollar rose 0.5 per cent at 0.8081. Versus the yen, the U.S. currency gained 0.3 per cent to 146.945. "July's rebound in the dollar ran into a wall last week, but so far there's no sign of a big jump in any risk premium for holding U.S. assets," said Karl Schamotta, chief market strategist, at Corpay in Toronto. "Strong corporate earnings are - so far - managing to overshadow fears of an incipient slowdown in labor markets, the impact of higher tariffs, the threat to the independence of U.S. statistical agencies, and the growing likelihood that the next Fed chair tries to lead monetary policy in an inflation-boosting dovish direction," he said. BLS FIRING; KUGLER RESIGNATION In other developments, Trump fired BLS Commissioner Erika McEntarfer on Friday, accusing her of faking the jobs numbers. An unexpected resignation by Fed Governor Adriana Kugler also opened the door for Trump to make an imprint on the central bank much earlier than anticipated. Trump has been at loggerheads with the Fed for not lowering interest rates sooner. The developments sent the dollar down more than 2 per cent against the yen and roughly 1.5 per cent against the euro on Friday. The euro slipped 0.2 per cent on Monday to $1.1568, while sterling was little changed at $1.3275. Trump said on Sunday he will announce a candidate to fill the open position at the Fed and a new BLS head in the next few days. Against a basket of currencies, the dollar edged up 0.1 per cent to 98.77, after sliding more than 1.3 per cent on Friday. The dollar rose 3.4 per cent in July, its biggest monthly gain since a 5 per cent jump in April 2022 and first monthly rise of the year, as markets became more at ease with Trump's trade policy and economic data had remained resilient in the face of tariffs. In other markets, the policy-sensitive two-year Treasury yield fell to a three-month low of 3.659 per cent on Monday as traders heavily raided bets of a Fed cut in September, while the benchmark 10-year yield strayed not too far from a one-month low at 4.2257 per cent. Markets are now pricing an 84 per cent chance the Fed will ease rates by a quarter-point next month owing to the weaker than expected jobs data, according to CME's FedWatch, with just under 60 basis points worth of cuts expected by December, implying two 25 basis point cuts and a 40 per cent chance of a third. Currency bid prices at 4 August 07:01 p.m. GMT Descript RIC Last U.S. Pct YTD High Low ion Close Chang Pct Bid Bid Previous e Session Dollar 98.749 98.662 0.1 per cent -8.98 per cent 98.982 98. index 59 Euro/Dol 1.1568 1.1586 -0.15 11.74 per cent $1.159 $1. lar per cent 7 155 Dollar/Y 146.92 147.415 -0.34 -6.63 per cent 148.08 146 en per cent .89 Euro/Yen 169.99 170.76 -0.45 4.15 per cent 171.16 169 per cent .92 Dollar/S 0.808 0.8039 0.54 per cent -10.94 0.8096 0.8 wiss per cent 041 Sterling 1.3277 1.3278 0 per cent 6.16 per cent $1.333 $1. /Dollar 1 325 5 Dollar/C 1.3782 1.3787 -0.03 -4.16 per cent 1.3793 1.3 anadian per cent 759 Aussie/D 0.646 0.6475 -0.21 4.43 per cent $0.648 $0. ollar per cent 9 646 Euro/Swi 0.9346 0.9315 0.33 per cent -0.5 per cent 0.9359 0.9 ss 312 Euro/Ste 0.871 0.8724 -0.16 5.28 per cent 0.873 0.8 rling per cent 688 NZ 0.59 0.5919 -0.3 per cent 5.46 per cent $0.592 0.5 Dollar/D 9 901 ollar Dollar/N 10.268 10.1751 0.91 per cent -9.66 per cent 10.285 10. orway 3 230 8 Euro/Nor 11.8852 11.859 0.22 per cent 0.99 per cent 11.898 11. way 843 Dollar/S 9.6592 9.6365 0.24 per cent -12.33 9.6914 9.6 weden per cent 215 Euro/Swe 11.1796 11.1693 0.09 per cent -2.51 per cent 11.199 11. den 2 170 9
Straits Times
4 hours ago
- Straits Times
Netherlands uses new NATO channel to pay for US arms for Ukraine
Sign up now: Get ST's newsletters delivered to your inbox Military equipment are pictured as the Dutch government presents plans to increase spending on defence to 2% of GDP in the wake of the Russia-Ukraine conflict, in Amersfoort, Netherlands, September 5, 2024. REUTERS/Piroschka van de Wouw/File Photo AMSTERDAM/BRUSSELS - The Netherlands said on Monday it will contribute 500 million euros ($578 million) to purchase U.S. military equipment for Ukraine, becoming the first NATO country to contribute to a new mechanism to supply Kyiv with American weapons. President Donald Trump said last month the U.S. would provide weapons to Ukraine, paid for by European allies, but he did not provide details on how this would work. "As the first NATO ally, the Netherlands will deliver a €500 million package of US weapon systems (including Patriot parts and missiles)," Dutch Defence Minister Ruben Brekelmans said in a post on X. NATO chief Mark Rutte, a former Dutch prime minister, welcomed the announcement and said he has encouraged other alliance members to participate in the new mechanism, called the NATO Prioritised Ukraine Requirements List (PURL) initiative. 'This is about getting Ukraine the equipment it urgently needs now to defend itself against Russian aggression,' Rutte said in a statement. 'I have written to all NATO Allies, urging them to contribute towards this burden sharing initiative, and I expect further significant announcements from other Allies soon,' he added. The U.S. ambassador to NATO, Matthew Whitaker, told Reuters on Monday that he expected many more countries to announce over the coming weeks that they will participate. 'We're moving as fast as possible,' Whitaker said in an interview at NATO headquarters in Brussels. Asked about a timeline for getting U.S. deliveries to Ukraine under the new mechanism, he said, 'I think we'll see it moving very quickly, certainly in the coming weeks, but some even sooner than that. 'The Dutch are just the first of many. You're going to see a series of announcements in the coming weeks,' he added. NATO said it would coordinate the new initiative, which is funded by European members of the alliance and Canada and will be divided into packages worth approximately $500 million. In a statement, the alliance said, "Working closely with Ukraine and the United States, the Supreme Allied Commander Europe Alexus Grynkewich will validate packages that correspond to Ukraine's needs, such as air defence, ammunition and other critical equipment for rapid delivery from U.S. stockpiles". Kyiv welcomed the Dutch decision. "Ukraine, and thus the whole of Europe, will be better protected from Russian terror," Ukrainian President Volodymyr Zelenskiy wrote on X. "I am sincerely grateful to the Netherlands for their substantial contribution to strengthening Ukraine's air shield," he added. REUTERS
