Dollar frail on weak economic data, trade uncertainty lingers
The dollar weakened due to concerns about the U.S. economy. Data indicated slow growth and inflation worries. The euro remained steady before the European Central Bank's expected rate cut. Investors are awaiting U.S. payrolls data. Trade tensions and potential Federal Reserve rate cuts are also impacting markets. The ECB is likely to cut rates to support the Eurozone economy.
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The dollar softened on Thursday, stuck near six-week lows after weak U.S. economic data revived fears of slow growth and high inflation, while the euro was steady ahead of an expected interest rate cut from the European Central Bank The soft data, which showed U.S. services sector contracted for the first time in nearly a year in May and an easing labour market, led to a rally in Treasuries, with the yield on the U.S. 10-year Treasury note hovering at four-week lows.The dollar was a tad lower against the yen at 142.80, while the euro stood at $1.1424, not far from the six-week high it touched at the start of the week. Sterling last fetched $1.3557.Markets have been rattled since U.S. President Donald Trump announced a slate of tariffs on countries around the globe on April 2, only to pause some and declare new ones, leading investors to look for alternatives to U.S. assets.The dollar weakness has been the story of the year, with foreign exchange strategists surveyed by Reuters expecting further declines on mounting concerns about the U.S. federal deficit and debt.The dollar index, which measures the U.S. currency against six others, was at 98.749 and has dropped about 9% this year, poised for its weakest yearly performance since 2017.Investors are now awaiting Friday's monthly payrolls figures to gauge the state of the labour market after payroll processing firm ADP reported that U.S. private payrolls increased far less than expected in May.The more comprehensive employment report on Friday is expected to show that non-farm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, according to a Reuters survey of economists. The unemployment rate is forecast to hold steady at 4.2%."May's payrolls data tomorrow will be important to see if investor concerns are valid or overdone. A soft labour market report is likely to result in outsize falls in the U.S. dollar," said Mansoor Mohi-uddin, chief economist at Bank of Singapore.Trump on Wednesday redoubled his calls for Federal Reserve Chair Jerome Powell to lower interest rates after the ADP data was released.Markets have priced in 56 basis points of rate cuts this year from the Fed, with traders pricing in a 95% chance for easing in September, LSEG data showed.In other currencies, the Australian dollar was 0.22% higher at $0.6507, while the New Zealand dollar rose 0.24% to $0.60425.Investors remain worried about U.S. trade negotiations and the lack of progress in hashing out deals ahead of the early July deadline.Trump called China's Xi Jinping tough and "extremely hard to make a deal with" on Wednesday, exposing frictions after the White House raised expectations for a long-awaited phone call between the two leaders this week.Attention will also be on Europe, where the central bank is widely expected to cut rates by 25 basis points later on Thursday. Investors will look for clues for what comes after that even as the case grows for a pause in its year-long easing cycle.The ECB has cut rates seven times in 13 months as inflation eased from post-pandemic highs, seeking to prop up a euro zone economy that was struggling even before Trump's erratic economic and trade policy dealt it yet another blow."Lower energy prices, forthcoming fiscal stimulus, and reduced global recession risks warrant a wait-and-see approach to further policy moves," said Laura Cooper, head of macro credit and investment strategist at Nuveen."While a potential insurance cut could come in September, it will be contingent on incoming data - yet risks appear skewed to the upside amid depressed trade-led expectations."
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Time of India
16 minutes ago
- Time of India
Top US universities face backlash over rising international enrollment under Trump
For decades, top US universities have aggressively expanded their global reach, enrolling more international students as part of a strategic effort to boost prestige, revenues, and academic competitiveness. Tired of too many ads? go ad free now Institutions such as Harvard University and Columbia University now count foreign students as a sizable portion of their student populations. But under President Donald Trump, those international ambitions are facing stiff political resistance. Trump has turned the steady rise in foreign student enrollment into a flashpoint, arguing that these students take away coveted seats from Americans and allow elite universities to sidestep national interests. His administration recently attempted to bar foreign students from entering the US to attend Harvard, using a broad federal law. Although a judge temporarily blocked the move on June 5, 2025, as reported by the AP, the message from the White House is clear: universities that built global campuses are now in the political crosshairs. Elite schools built global appeal over decades Three decades ago, just 11% of Harvard's student body came from outside the US. Today, that number is 26%, according to data analyzed by the AP from the Integrated Postsecondary Education Data System (IPEDS). Other Ivy League schools show similar or even higher international representation. Columbia University leads with 39.4% of its students coming from abroad, followed closely by Northeastern University at 39%. At many elite private schools, international enrollment more than doubled between 2013 and 2023. New York University and Northeastern saw especially steep climbs. The chart below shows the percentage of international students at the most selective US colleges in the 2023–24 academic year: University Number of International Students Percent of Student Body (%) Columbia University 13,900 39.4 Northeastern University 12,100 39.0 Harvard University 7,900 25.9 University of Pennsylvania 6,900 24.0 University of Chicago 5,600 30.7 Stanford University 4,600 25.1 Duke University 4,400 25.4 Yale University 3,600 23.6 Massachusetts Institute of Technology (MIT) 3,500 29.4 Brown University 2,300 19.8 Princeton University 2,100 23.7 Vanderbilt University 1,700 12.9 Dartmouth College 1,400 21.0 California Institute of Technology (Caltech) 788 32.0 Pomona College 213 12.8 Data is for the top 15 most selective colleges in the U.S., Tired of too many ads? go ad free now as measured by admissions rate. Source: Integrated Postsecondary Education Data System (IPEDS) Visa reviews spark fear of policy retaliation In recent weeks, Trump's administration has tightened student visa reviews, prompting concerns among faculty at Columbia University. In a newsletter quoted by the AP, the Stand Columbia Society wrote, "Columbia's exposure to this 'stroke of pen' risk is uniquely high," referring to the president's authority to act unilaterally. Colleges say their global strategy has long been about attracting the best minds and ensuring financial sustainability. William Brustein, a former university official who led international recruitment efforts, told the AP it became "a gold rush" in higher education as schools chased higher global rankings and tuition revenue. He added that foreign students, who often pay full tuition, help fund scholarships for US students. Graduate programs see biggest international gains According to Harvard, most of its growth in foreign enrollment has occurred at the graduate level. Between 2013 and 2023, its undergraduate foreign student population rose by about 100 students, while graduate programs saw an increase of nearly 2,000. As reported by the AP, William Kirby, a Harvard historian, explained, "If you don't recruit the very best students internationally... then you will not be competitive. " Trump questions fairness, universities defend diversity Trump publicly suggested on May 31, 2025, that Harvard should cap foreign enrollment at 15%, saying at a news conference, "We have people who want to go to Harvard and other schools, they can't get in because we have foreign students there," as reported by the AP. In response, Harvard called the move "yet another illegal retaliatory step," stating in court documents that its international recruitment is the result of a "decades-long project." As quoted by the AP, the university argued that losing student visa access would immediately harm its mission and reputation. A political fault line in higher education Supporters of international enrollment argue that foreign students pour billions into the US economy and fuel critical industries such as tech and engineering. As Rajika Bhandari, a higher education consultant, told the AP, families in countries like India and China are deeply brand-aware and invest heavily to gain admission to Ivy League schools. Now, with internationalization becoming a political fault line, universities face tough questions: Can they maintain their global stature while navigating increasingly nationalistic policy? As the AP noted, in an interconnected global economy, institutions that cannot attract talent from around the world risk falling behind.
Hindustan Times
an hour ago
- Hindustan Times
MORNING BID AMERICAS-Trump-Musk bust-up smolders
LONDON, - What matters in U.S. and global markets today Donald Trump's hotly anticipated meetings with the leaders of the world's two other biggest economies ended up being sideshows compared to his online bust-up with billionaire backer Elon Musk. It's Friday, so today I'll provide a quick overview of what's happening in global markets and then offer you some weekend reading suggestions away from the headlines. Today's Market Minute * White House aides scheduled a call between Donald Trump and Elon Musk for Friday, Politico reported, after a huge public spat that saw threats fly over government contracts and ended with the world's richest man suggesting the U.S. president should be impeached. * U.S. President Donald Trump and Chinese leader Xi Jinping confronted weeks of brewing trade tensions and a battle over critical minerals in a rare leader-to-leader call on Thursday that left key issues to further talks. * China has signalled for more than 15 years that it was looking to weaponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise. The scramble in recent weeks to secure export licences for rare earths shows China has devised a better, more precisely targeted weapon for the trade war. * There are some tentative early signs that weak thermal coal prices are starting to boost import demand among Asia's heavyweight buyers China and India. Read Reuters Columnist Clyde Russell to find out more. Trump-Musk bust-up smolders For markets trying to navigate everything from creeping signs of labor market weakness to the latest European Central Bank easing, the spat between the U.S. president and the world's richest man proved more than a distraction. It remains to be seen if it overshadows the May payrolls report later on Friday. The extraordinary sparring match drew in other major political and business figures and included potentially seismic accusations and threats. In turn, the share price of Musk's Tesla plummeted almost 20% at one point, dragging Wall Street stock indexes and crypto tokens deep into the red. The public feud appeared to cool off somewhat overnight and allowed stock futures to regain some lost ground. But the fact that the spat overshadowed the other major events of the day was another marker of this administration's unpredictability. The substance of the row was over Trump's "one big beautiful" fiscal bill that Musk thinks is a "disgusting abomination" due to the amount of spending. The bill, which has yet to be passed by the Senate, is expected to add $2.4 trillion to the U.S. debt over the next decade, based on CBO estimates. The vast bulk of this will likely be incurred over the next four years. In the background, the call between Trump and China's President Xi Jinping delivered no breakthroughs in the trade row apart from warmer words and an agreement to resume talks. The Oval Office meeting with Germany's Chancellor Friedrich Merz was relatively positive about trade and diplomatic issues. Earlier in the day, the ECB cut rates again as expected and suggested that there may be a pause at its next meeting and that it could be near the end of its easing cycle now that 'real' inflation-adjusted rates are back near zero. The euro hit a six-week high on Thursday regardless, although it gave back those daily gains today. Rising weekly U.S. jobless claims, meantime, cast a shadow over today's release of the May employment report. Consensus forecasts are for a slowdown in payroll growth to 130,000. Treasury yields, which ebbed and flowed all day on the conflicting signals from the trade meetings and stock gyrations, are back hovering at the week's lows ahead of the jobs report. Even though Federal Reserve officials continue to signal caution about the uncertain outlook ahead, markets are now priced for a resumption of Fed cuts by September. Into the already confusing mix, the Treasury released its annual report on potential currency manipulation overseas, adding Switzerland and Ireland to its watchlist, which already includes China, Japan, Germany, South Korea, Taiwan, Singapore and Vietnam. The list likely carries more heft than usual amid multiple tense trade negotiations. Markets assume the U.S. may pressure other countries to let their currencies appreciate versus the dollar as part of deals to avert severe tariffs being re-imposed next month. The Swiss National Bank responded on Friday by saying it would intervene in currency markets where necessary to keep inflation on track. Intervention to cap a super-strong franc has been a critical monetary tool used over the past decade and may need to be tapped again now that Swiss inflation has returned negative just as the SNB's key interest rate is set to return to zero in June. Elsewhere, China's yuan slipped against the dollar while falling to a near two-year low versus its major trading partners on Friday as the Trump-Xi call fell short of many expectations. Stock markets overseas were mixed on Friday as Wall Street remained on edge and the U.S. jobs report loomed. In the euro zone, first-quarter GDP was revised higher to show twice the growth originally estimated: 0.6% quarter-on-quarter, leading to an annual rate of 1.5%. India's central bank cut key rates by a larger-than-expected 50 basis points to 5.5%, its steepest cut in five years. It also slashed its cash reserve ratio - funds that banks are required to hold - by 100 bps to 3% in a surprise move aimed at boosting lending and speeding up policy transmission. In single stocks, Tesla shares recovered around 5% in Frankfurt on Friday, having closed down 14% in New York yesterday amid the Trump-Musk spat. It lost about $150 billion in market value yesterday, which caused the erstwhile member of the 'Magnificent Seven' megacaps to drop to ninth in the list of most-valuable firms behind Broadcom and Berkshire Hathaway. Broadcom's shares, however, fell 4% in extended trading overnight as its forecast-beating earnings seemed to underwhelm the Street. In Bank of America's weekly tally of fund flows, U.S. stocks saw outflows of $7.5 billion, the third week of exits, while European shares saw inflows of $2.6 billion, the eighth week of inflows. Weekend reading suggestions * 'BLUE BONDS': European countries should seize the moment to boost the size and liquidity of jointly-issued euro sovereign debt, and a solution could be to replace a proportion of the stock of national bonds with senior Eurobonds, or 'blue bonds'. So says a 'working document' from Peterson Institute senior fellow and former IMF chief economist Olivier Blanchard in a paper jointly written with Citadel's Angel Ubide. * NUCLEAR BLIND SPOTS: United Nations nuclear watchdogs appear to have lost track of some critical elements of Iran's nuclear activities since U.S. President Donald Trump ditched a 2015 deal that imposed strict restrictions and close supervision by the International Atomic Energy Agency. Reuters Francois Murphy and John Irish report on key blind spots that include not knowing how many centrifuges Iran possesses or where the machines and their parts are produced and stored. * OCEAN ECONOMY: Trade in the global 'ocean economy' hit as much as $2.2 trillion in 2023, about 7% of total world trade, but this trade is increasingly threatened by climate change and environmental problems, the United Nations trade and development arm UNCTAD showed in a report this week. The ocean economy grew faster than the world economy at large in the five years to 2020 and an estimated 100 million jobs depend on it. * 'TRUMP DOCTRINE': The emerging foreign policy under President Donald Trump resembles a 'look the other way' doctrine or a 'none of our business' doctrine, argues former George W. Bush State Department official Richard Haass on Project Syndicate. "The U.S. sought to change the world, annoying some and inspiring others. Those days are gone, in some ways for better, but mostly for worse. The US has changed. It is coming to resemble many of the countries and governments it once criticized." * MAGNETIC FEW: A small team in China's Ministry of Commerce decides the fate of the global auto industry, one rare earth magnet export permit at a time. China holds a near-monopoly on rare earth magnets, a key component in electric vehicle motors, and it added them to an export control list in April as part of its trade war with the United States. Reuters' Laurie Chen and Lewis Jackson show how it falls to the Bureau of Industrial Security and Import and Export Control, part of China's Ministry of Commerce, to review export permits for the rare earth magnets, vital for car motors, wind turbines and even U.S. F-35 fighter jets. * FINANCE AND AI: Artificial intelligence advances in the financial sector offer enhanced data analysis, risk management and capital allocation, but there are problems too, according to a paper on CEPR's VoxEU website. As AI systems become more widespread, they introduce challenges for regulators tasked with balancing the benefits of innovation with the need for financial stability, market integrity, consumer protection and fair competition. * DRONE ATTACK: Ukraine's 'Operation Spider's Web' last weekend used smuggled drones to attack bomber aircraft deep inside Russia, and the 'remarkable event' could affect the future of conflict, argues Council on Foreign Relations fellow Michael Horowitz. The attack "clearly shows that even targets deep in a country's territory could now be at risk". * IMF EUROPE: The case for closer European economic integration has become more compelling as external challenges multiply, according to Alfred Kammer, director of the International Monetary Fund's European Department. Stressing the need for the completion of the single market, Kammer said capital markets integration has been too slow and that cross-border flows have been frustrated by persistent fragmentation. "If history is a guide, Europe can turn adversity to advantage." * ALPINE TRUSTS: Liechtenstein is examining tightening control of scores of Russian-linked trusts abandoned by their managers under pressure from Washington. Reuters' John O'Donnell and Oliver Hirt cite sources in reporting that the country, one of the world's smallest and richest, is home to thousands of low-tax trusts, hundreds with links to Russians. Chart of the day Supply chain stress ticked up in May, data from the Federal Reserve Bank of New York said on Thursday. The bank noted that its Global Supply Chain Pressure Index for May rose to 0.19 from -0.28 in April, only the second time it stood in positive territory this year and the highest reading since the 0.20 seen in August of last year. Although the index remains subdued compared to the post-pandemic surge, growing concerns about the impact of the tariff war - particularly the impact of China's restrictions on rare earth and minerals exports on the global auto industry - will ensure policymakers keep a close eye on these pressures for any signs of re-emerging inflation. Today's events to watch * U.S. May employment report , April consumer credit ; Canada May employment report Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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Business Standard
an hour ago
- Business Standard
Rupee gains in volatile trade after RBI's big cuts; ends higher at 85.64/$
The Indian Rupee was hit by volatility but strengthened on Friday, after the Reserve Bank of India (RBI) unleashed a barrage of liquidity to boost economic growth amid a fragile global macroeconomic situation. The domestic currency appreciated 16 paise to end at 85.64 against the greenback, after closing at 85.80 on Thursday, according to Bloomberg. During the session, the currency witnessed high volatility, with the unit sliding to the 86 mark against the dollar. The RBI's monetary policy committee (MPC) cut the repo rate by 50 basis points to 5.50 per cent, marking the third consecutive reduction in 2025. The central bank also cut the cash reserve ratio (CRR) by 100 basis points to 3 per cent, which is likely to infuse ₹2.5 trillion in the system. Further, the RBI also shifted its monetary policy stance from 'accommodative' to 'neutral'. With foreign portfolio investor (FPI) flows remaining uncertain and recent inflows being tepid and sporadic, the rupee has been on a weakening trend, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. Meanwhile, the dollar index edged up as investors evaluated the phone call between US President Donald Trump and Chinese President Xi Jinping. The two leaders spoke on Thursday and agreed to resume trade talks through upcoming official-level meetings. The index, which measures the greenback against a basket of six major currencies, was up 0.24 per cent at 98.982. The dollar was headed for a weekly loss on Friday, undermined by signs of fragility in the US economy, and as trade negotiations between Washington and its trading partners made little progress despite a looming deadline, Bhansali said. Meanwhile, the friends-turned-foes episode deepened tensions as the US President Donald Trump threatened to end Elon Musk's government contracts after his comment on the 'Big Beautiful Bill', sending Tesla shares to their worst in four years.
