Euro hits fresh highs on peace talks in Ukraine, BoE in focus
The U.S. dollar remained under pressure amid growing concerns over partisanship creeping into key U.S. institutions.
Initial U.S. jobless claims, due later in the session, will be closely watched following last week's disappointing nonfarm payrolls report, which triggered a dovish repricing of the Federal Reserve easing path and a
slide in the greenback
.
The euro rose 0.14% to $1.1677, its highest level since July 28, with a possible peace deal in Ukraine seen as a positive driver for the single currency.
Ukrainian President Volodymyr Zelenskiy said he planned contacts with Germany, France and Italy on Thursday to discuss
progress toward peace
.
"Sectors to benefit (from a peace deal) should be European consumers, growth-sensitive and construction-related sectors," said Mohit Kumar, economist at Jefferies.
"It should also be positive for Eastern Europe as most of the reconstruction efforts would likely flow through Eastern European economies." Sterling was steady ahead of a BoE policy announcement, with markets widely expecting another rate cut.
Markets will watch the expected three-way voting split for any signal that the central bank might change its guidance on a 'gradual and careful' easing path.
'We suspect conviction levels are low in the supposed consensus view that rates can only go down and pressure affected currencies,' said Geoff Yu, strategist at BNY, after warning that markets may be too complacent about stagflation risks.
"The Bank of England will kick off what we expect to be a new run of cuts through August and September in Europe, but over-committing to easing risks policy error and prolonging stagflation," he added.
The Swiss franc rose 0.20% to 0.8047 versus the dollar , even as Swiss President Karin Keller-Sutter returned from Washington empty-handed after a trip aimed at averting a crippling 39% tariff on the country's exports to the U.S.
"While we still believe that a deal will ultimately be reached, it is likely to be far more expensive than Switzerland had hoped," said Michael Pfister, strategist at Commerzbank.
Last week, U.S. President Donald Trump fired the official responsible for the labour data he did not like, and focus is centring on his nomination to fill a coming vacancy on the Fed's Board of Governors and candidates for the next chair of the central bank. The dollar index, which measures the greenback against a basket of major peers, dropped to a fresh 1-1/2-week low at 98.00, down 0.20% on the day.
Fed funds futures are now pricing in a 94% probability of a 25 basis point cut at the Fed's September meeting, up from 48% a week ago, according to the CME Group's FedWatch Tool. In total, traders see 60.5 basis points in cuts this year. The president said on Tuesday he would decide on a nominee to replace outgoing Fed Governor Adriana Kugler by the end of the week and had separately narrowed the possible replacements for Fed Chair Jerome Powell to a short list of four.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
a minute ago
- The National
Why US tariff sledgehammer approach with India can prove counterproductive
What are, in theory, some key US strategic objectives? To diminish Russian energy earnings, bolster an anti-Russian coalition, build up India as a counterweight to China, open the Indian market to American exports, keep oil prices moderate, and promote global economic growth. Its latest oil sanctions policy pursues the first goal at the cost of all the others. US President Donald Trump's latest executive order adds a 25 per cent tariff on India's goods, because of its purchase of Russian oil, on top of the general 25 per cent levy. 'I don't care what India does with Russia. They can take their dead economies down together, for all I care,' he posted. The sanctions threat has already had an effect. Russia's Urals crude blend had been sold in India almost at parity to the international benchmark, Brent, a two weeks ago; now it is discounted by more than $5 per barrel. Indian refineries have stopped spot buys of Russian crude and secured at least 22 million barrels of non-Russian oil for September and October. If India cuts back on Russian oil, perhaps as part of a compromise deal, China will pick up some of the slack. But for logistical reasons, it is unlikely that it can take all the spare Russian crude. That will cut Russian energy earnings. Mr Trump announced on Friday he would meet Russian President Vladimir Putin in the former Russian territory of Alaska. On its own, further sanctions pressure will not force Mr Putin into serious negotiations. But it will add to other strains on the Russian economy, and perhaps slow its war machine. Europe, finally, is taking measures against other Russian exports, particularly in phasing out imports of its adversary's gas. So far, so good. What about the other effects of this policy? India has not taken the news well, to say the least. Its position on Russia's war against Ukraine has been morally questionable, its refiners have jumped on the chance to profit from discounted crude, and it is not smart to condone invasion when China has occupied Indian-claimed land since 1962. India's purchases of Russian oil rose from 0.2 per cent of its needs before the invasion of Ukraine, to 36 per cent now, selling some of the products back to Europe. New EU measures will indeed clamp down on that loophole. But New Delhi rightly points out that the whole structure of US and European sanctions was designed to allow it, and China, to continue buying Russian oil to avoid escalating oil prices. By restricting Russian sales, it was hoped its customers could extract discounts – as they have, although these have diminished over time. And sales using western shipping or services were supposed to abide by a price cap. This has proved hard to enforce, but that is not India's responsibility. India is far from the only country buying Russian oil. While India imports about 1.8 million barrels from Russia, last month, China bought about 1 million barrels per day by sea and a similar amount by overland pipeline, and Turkey took about 300,000 bpd. Even in Europe, Hungary and Slovakia have exemptions to continue buying some Russian crude. In June, Japan imported its first Russian oil for three years. Indian Prime Minister Narendra Modi promptly invited Mr Putin to visit India for an annual summit later in the year. India signed agreements to co-operate with Russia on aerospace as well as in various strategic minerals, while suspending purchases of American weapons. And Mr Modi plans to visit China for the first time in seven years later this month. Beijing will not bow to similar threats. If necessary, it will endure even higher US tariffs. It cannot afford to seem weak; making Chinese goods unaffordable will push up prices and empty shelves in the US, piling political pressure on Mr Trump. It has cut exports of critical minerals to stress US technology and defence corporations. The Middle Kingdom now buys almost no American oil, gas or coal. It will no doubt snap up additional Russian barrels at a discount. India's domestic market is indeed the most protected among major economies, or was, before the US began walling itself off. But Mr Trump's tariffs are imposed, varied, exempted and withdrawn so frequently and for so many ostensible reasons – safeguarding national security, boosting domestic manufacturing, raising revenue, forcing others to open their markets, stopping drug smuggling – that they cease to be useful as a negotiating tool. Cutting Russian oil exports will raise world oil prices. Mr Trump has shown himself very sensitive to domestic pump prices and inflation. His trade adviser and tariff fan Peter Navarro has said the President favours oil prices of about $50 per barrel. Yet this part of the tariffs and sanctions threats actually may not work out too badly. If China holds firm, then the maximum loss to the market from the 'secondary tariffs' will be the 2.1 million bpd of recent Indian and Turkish imports, and probably less. That would boost oil prices to the mid-80s per barrel. The oil market is expected to soften in the final part of the year – partly because of economic uncertainty caused by the US trade offensive. Opec+ has made large increases in allowable production. The group, of course, includes Russia, but it still holds dry powder. Having now in principle eliminated the 2.2 million bpd of 'voluntary' cuts by a subgroup of eight countries, it has a further voluntary tranche of 1.65 million barrels per day, then 2 million bpd of cuts committed by all Opec+ members, which is due to expire at the end of next year. Not all of these are real barrels. Members will increasingly find that they cannot raise production to target levels, particularly at short notice. But Saudi Arabia, the UAE and Iraq still have significant room to expand, and Kazakhstan continues overproducing substantially. They will be glad to fill a market gap in India, from which Russian oil had squeezed them out. That assumes that Russia does not retaliate by blocking Kazakh exports too, which go through its territory, or that US sanctions do not inadvertently catch Kazakh barrels. Somewhat higher prices would also encourage growth in US output, compensation for the Texan drillers who have been disgruntled by their president's pursuit of cheaper oil even as they cheer his pro-fossil fuel agenda. A more skilful policy would agree with India that it would steadily reduce purchases of Russian oil, issuing waivers to Indian refiners who comply, and sanctioning those who do not. That is what was previously done with Iranian oil exports. But otherwise, insulting India, and using the tariff sledgehammer instead of the sanctions scalpel, will prove counterproductive. The US is pushing the dominant power in South Asia, a natural ally, into the arms of its two Eurasian rivals. It will advantage the Chinese economy while it makes Beijing seem the more reasonable international partner. Or, Mr Trump may back down in Alaska and hand Mr Putin another economic and diplomatic win.
The National
an hour ago
- The National
Lengthy Schengen visa delays and costly fees prompt UAE residents to scrap European holiday plans this summer
A months-long wait for Schengen visas has prompted some UAE residents to abandon holiday plans in Europe in favour of countries with hassle-free visa rules this summer. Although Europe remains high on travel getaway lists, many holiday-goers have opted to book summer trips to Africa and Asia after failing to secure visa appointments to countries in Europe despite starting the process in January. Others paid travel agents between Dh300 and Dh2,500 to secure dates to submit documents and apply for Schengen visas. UAE residents have expressed frustration over the arbitrary nature as they were given short 15-day stays after securing year-long Schengen visas in previous years. VFS Global, the company that facilitates the Schengen visa process in the UAE, said it did not control the appointments nor the visa validity period. 'Appointment slots are not controlled by VFS Global, these are released by the respective embassy or consulate as per availability. Similarly, processing timelines and decisions on visa applications are the sole prerogative of the embassies/consulates, and vary from case to case,' Monaz Billimoria, who is regional head in the UAE for VFS Global, told The National. 'Europe has traditionally been a popular destination for travellers from the UAE, with demand increasing year or year, especially during peak travel seasons like the summer holidays. This year is no different.' VFS said an application for a Schengen visa could be submitted up to six months ahead of the intended travel date and urged travellers to plan travel 'well in advance' to avoid limited appointment availability. The company also cautioned travellers against agents promising quick appointments in exchange for high fees. 'VFS Global does not work with any agents or travel companies for appointment bookings. Appointments are available to all on our website on a first-come-first-served basis,' Ms Billimoria said. 'We urge applicants to beware of fraudulent third-party entities posing as VFS Global or embassy staff promising faster appointments and guaranteed visa outcomes for an additional fee. VFS Global does not charge for booking an appointment.' Shift away from Europe Preparing months in advance did not work for Dubai resident Cherry Pachisia who could not find a slot despite closely tracking appointment lists since January. Instead her family enjoyed sightseeing in Turkey last year and will be in Kenya this month. 'We dropped Europe as an option for a holiday, it's just not worth it trying to fight for a visa like this,' said Ms Pachisia, who works in the energy sector. 'It's quite frustrating because I also need a visa for work travel and checking online myself for appointments has not worked.' A seasoned business traveller, Ms Pachisia and her family also have 10-year US and UK visas. They decided against paying about Dh300 per person, including service charges, to travel companies for the appointment and processing fees. This is apart from the non-refundable Dh390 Schengen visa fee plus Dh146 service charge. The Schengen visa allows entry to 29 European countries - most of which are in the EU- to non EU-nationals. While Emiratis do not need a visa to visit Schengen countries, UAE residents from numerous countries in Asia, Africa and South America must apply. 'My message to other travellers is first, think if you really want to go to Europe because it's quite messy getting a Schengen visa,' said Ms Pachisia, an Indian resident. The appointments system can appear to work like a roulette with travel companies advising people to seize an open appointment slot with any European country and not specifically the country they want to travel to. Many residents work with multiple travel companies depending on which firm can secure an appointment. South African teacher P Anderson has booked a vacation in Bali this year. 'I tried for months for an appointment,' the primary school teacher said. 'I have friends in Europe but now we will meet in Indonesia. I'm putting Europe behind me and the money I save, I can use to explore other countries.' Paying a hefty fee Another traveller, Ms Ahmed, a marketing professional who did not want to her full name to be published, paid a travel company Dh2,500 as she needed to be in Portugal this summer. This is separate from the Schengen visa fee and additional charges such as premium lounge access. The last time she remembers securing an appointment on her own without asking a travel agency for assistance was three years ago. 'The only thing I'm paying for is the convenience of getting an appointment date and not constantly going on to the VFS website, constantly looking for a date and being disappointed,' said Ahmed, from India, who finally secured a one-year visa. 'You need to sign an agreement with the company that you will accept whichever country they get an appointment with and if you miss it, you lose your money. This makes me fearful for next year when I will have to do this process again.' Travel agencies told of companies with staff dedicated to finding appointments, of lengthy wait times of five to six months and slots booked up to September. 'Everybody is suffering from delays, it's not recent, this has been the case for more than a year,' said Mohamed Zoeb, head of sales at Avalon travel agency. 'Travel agencies have our own connections and we use these to help those who need to travel in emergencies. In the end, it's up to a client to look at the market and evaluate which agency is a right fit.' Athletes left in limbo The uncertainty has also led to anxiety among athletes, who stress about their visa instead of focusing on training for sporting events in Europe. Jad, a triathlete in Dubai, typically obtained one-year visas over the past few years. The Lebanese national was disappointed to receive a 15-day visa this year limiting him to a single competition in France, unlike his teammates who will enter multiple sporting events this year. 'It was quite disheartening because you build and train for more than a year. Normally, I have peace of mind because my Schengen visa is for a year minimum. The issue is there are no appointments and I've been trying since January.' Jad works in the real estate sector and travels to Europe at least three times a year on vacation to be with family and friends. He worked with three travel agents to secure an appointment. 'The people I train with ask why I'm stressed. I tell them they can go easily because they have British or Irish passports. I can't even go to training camps because I need to plan so far in advance, it's ridiculous,' he said. 'There is a wedding in France my family will be at but I can't go because my visa is for only 15 days. It's a disaster.'
Khaleej Times
10 hours ago
- Khaleej Times
Liverpool's Uruguay striker Nunez joins Saudi club Al-Hilal
Liverpool's Uruguay forward Darwin Nunez has joined Saudi Arabia's Al-Hilal from the Premier League champions on a three-year deal, both clubs said on Saturday. Financial details of the transfer were not revealed but British media reported that the Saudis paid 53 million euros ($61.69 million) to the Anfield outfit for the 26-year-old. "Al-Hilal Club Company is pleased to announce the signing of Uruguayan striker Darwin Nunez from Liverpool FC on a three-year contract," the Saudi club said on their website. "Nunez has just joined the squad during the current pre-season training camp in Germany," Al Hilal added. Nunez joined Liverpool in June 2022 from Benfica for an initial fee of 75 million euros but struggled for consistency, with 40 goals and 26 assists in 143 games in all competitions. The striker found himself on the fringes of the first team during Liverpool's title-winning campaign last season, starting only eight league matches and netting five times. His departure will help finance Liverpool's close-season outlay of almost 300 million pounds so far. They have already signed Germany playmaker Florian Wirtz for a club-record fee of up to 116 million pounds and French forward Hugo Ekitike for 69 million plus add-ons. Al-Hilal, under former Inter Milan manager Simone Inzaghi, became the first Asian club to defeat a Premier League side in an official match when they beat Manchester City at the Club World Cup last month. Inzaghi's new side are aiming to secure a record-extending 20th league title this season, having finished second in the Saudi Pro League last term. Their other high-profile signing of the transfer window was Theo Hernandez from AC Milan.
