Hong Kong May Need Further FX Intervention, OCBC Bank Says
OCBC Bank's Frances Cheung shares her views on the Hong Kong dollar (HKD) after the city's monetary authority intervened to defend the peg to the US dollar (USD). She tells Bloomberg Television that the amount of local currency the HKMA bought "was actually quite small" and that she suspects "further or additional FX intervention will be needed." (Source: Bloomberg)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
37 minutes ago
- Yahoo
Powell: Fed's interest rate control toolkit depends on bank reserves
-- Federal Reserve Chairman Jerome Powell stated Wednesday that the central bank's ability to pay interest on bank reserves is a crucial component of its interest rate control toolkit and would be challenging to discontinue. During testimony before a Senate committee, Powell explained that returning to a scarce reserves system would be difficult. "If you were to want to go back to a scarce reserves, it would be a long and bumpy and volatile road," Powell said. "I wouldn't recommend that we undertake that road" and if it were done it "would not save any money." The Fed Chair also addressed several other key economic topics during his appearance. When asked about the U.S. dollar, Powell stated that the dollar "remains the world's reserve currency" but noted he doesn't "have a view on whether the dollar is overvalued." Powell indicated that the Fed plans to release something for comment regarding the Supplementary Leverage Ratio (SLR) on Wednesday. He agreed that adjusting the SLR would free up capital for banks. Additionally, he expressed confidence that the Fed would move forward on Basel 3 implementation "in the near future." Regarding the bond market, Powell stated it is "fine now, functioning well." He also emphasized the importance of continued investment in economic data collection. On monetary policy considerations, Powell clarified that the Fed doesn't factor federal debt into its monetary policy decisions. While acknowledging that fiscal policy can contribute to inflation, he declined to comment further on this relationship. Powell also addressed media reports about building amenities at the Fed, stating that such reports "are not accurate," and emphasized that the Fed takes "seriously our stewardship of public money." When asked about tariffs, Powell noted it is "very hard to predict how tariffs will show up in inflation." He added that changes to economic forecasts partly reflect the effects of trade policy. Related articles Powell: Fed's interest rate control toolkit depends on bank reserves U.S. said to restrict ethane exports to China Shell says no talks are taking place to acquire BP following mega-deal rumors Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
37 minutes ago
- Yahoo
Japan Reiterates It Cannot Accept 25% Car Tariffs From US
(Bloomberg) -- Japan's chief trade negotiator Ryosei Akazawa said the country can't accept the US's 25% tariffs on cars, adding that the Asian nation's automakers produce far more cars in the US than they export to America. US Renters Face Storm of Rising Costs US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Are Caught in Johannesburg's Taxi Feuds as Transit Lags Mapping the Architectural History of New York's Chinatown Japanese automakers make roughly 3.3 million cars in the US a year, a number that's far larger than the 1.37 million that they ship there, Akazawa told reporters on Thursday before leaving for Washington to hold his seventh round of trade negotiations with US counterparts. The companies have invested more than $60 billion in the US and created 2.3 million local jobs, Akazawa said. 'We have repeatedly explained to the US that Japan's automobile industry has made an enormous contribution to the US economy, and we intend to keep explaining this clearly and seek understanding,' Akazawa said. 'In any case, we consider the 25% automobile tariff to be unacceptable.' The auto tariffs are a sticking point in the bilateral negotiations as Washington focuses on its deficits in the sector, while Tokyo tries to protect its key economic pillar. After six rounds of talks over more than two months, the two sides have yet to come to any sort of agreement over tariffs. Of the 3.3 million cars made in the US, about 300,000 are shipped from the US to other nations, also helping to generate a trade surplus for the US, according to Akazawa. Still, Japan's trade surplus with the US last year stood at ¥8.6 trillion ($59.4 billion), the fifth largest on record. Roughly 82% of the gap was due to cars and car parts. The differential has put the nation in Trump's crosshairs as he tries to reduce US trade deficits using tariffs. Akazawa heads for the US capital after Japanese Prime Minister Shigeru Ishiba and US President Donald Trump last week failed to strike a deal over the higher US tariffs at the Group of Seven summit. As with other nations, Japan faces a combination of across-the-board tariffs and sectoral ones. The former is set to rise from 10% to 24% on July 9 barring a deal while the latter is comprised of a 25% levy on cars and auto parts and a 50% tariff on steel and aluminum. Tokyo has maintained its stance that it will try to settle all the tariff disputes in one go with a package that also addresses sectoral tariffs. Akazawa on Thursday said he will keep in mind the July 9 deadline while he voiced caution over weakening his negotiating position by setting a firm deadline. The tariffs are already hitting the Japanese economy with exports to the US slumping, particularly for cars. The economy is facing a risk of entering a technical recession ahead of an upper house election on July 20. --With assistance from Mari Kiyohara. (Updates with more context from fourth paragraph onward.) Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push How to Steal a House Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros ©2025 Bloomberg L.P.
Yahoo
37 minutes ago
- Yahoo
Chinese Toymaker Takes Drastic Action to Survive Trump's Tariffs
(Bloomberg) -- Ah Biao, the founder of a toy factory in southern China that makes magnetic puzzles and sensory tubes for American children, is still in business despite brinkmanship by US President Donald Trump. US Renters Face Storm of Rising Costs US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Are Caught in Johannesburg's Taxi Feuds as Transit Lags Mapping the Architectural History of New York's Chinatown When Trump hiked tariffs on China from 54% to 145% in early April, Ah Biao — a moniker his colleagues and friends call him — rented a factory in northern Vietnam. He packed 90 sets of iron or steel molds into 60 boxes, some weighing over than 700 kilograms (1,540 pounds), which were shipped to the Southeast Asian country for production to evade levies. Four weeks later, Trump abruptly lowered those tariffs back down to 30% in a 90-day truce with Beijing. Those same molds were quickly moved from a Chinese border town where they were awaiting customs clearance and rushed back into production in Shenzhen. Some production lines are operating 24 hours per day in two shifts. Furloughed workers — who kept their jobs after Ah Biao decided not to implement a plan to lay off a third of them — returned with full pay and overtime. Sixty more people were hired. In the meantime, Ah Biao is fervently keeping track of what's left of shipping availability to get his toys into the US as quickly as possible. Ah Biao, founder of Shenzhen Kate Plastic Products Co., is emblematic of millions of exporters across China's vast $4.7 trillion manufacturing sector. For all the attention on Trump's pledge to bring mass manufacturing back to American shores, one thing has become clear: China's factories are finding ways to remain central to the global supply chain. 'I felt that it was useless to just worry, you just have to do what you have to do. We can only act according to circumstances,' said Ah Biao, who declined to use his full name due to sensitivities around discussing geopolitical topics, of the ups and downs of the past few months. 'In short, the world is round, and we will always find a way.' That was already evident from the US President's first trade war with China, when exporters responded to tariffs by pouring out into Southeast Asia; Chinese businesses own over half of Cambodia's factories now, according to the country's industry ministry. Now in Trump's second, more damaging trade barrage, the exporters are also more determined to survive. The abrupt whiplash of trade negotiations has underscored the nimble resourcefulness of Chinese exporters, and their ability to stay relevant even as scores of countries try to slow the flow of imports from the world's second-largest economy. 'The US was willing to lower tariffs because it's very unlikely that Chinese products can be totally replaced in the short term,' said Jacqueline Rong, chief China economist at BNP Paribas SA. 'From the US standpoint, this was essentially a stress test that made it clear that there's no way to break away from China's supply chain in a short period of time.' Ah Biao, known to his US customers as Bill, said the company always valued relationships with American clients, who delivered large, stable orders for years uninterrupted — the US is its biggest market. During the supply chain and geopolitical chaos of the pandemic, the company's clients started asking it to look into diversifying manufacturing from China. He spent a month in Vietnam in 2022 in search of a new production base, but was disheartened by what he saw — upfront rental costs were extremely high, hiring skilled workers was difficult and shipping raw materials and equipment from China was expensive. The challenges there made the company realize it would take more time than expected to plan for the move. In the years since, Ah Biao said the company maintained good relations with his US clients, the biggest of which is Learning Resources Inc., a retailer of educational toys. His factory produces educational toys for the Vernon Hills, Illinois-based company, which sued the Trump administration in April over the tariffs. At its peak, as much as 80% of Learning Resources's products were made in China, Chief Executive Officer Rick Woldenberg told Bloomberg News, but as US relations with China worsened he decided to build up supply chains elsewhere. 'After Trump 1.0, we believed that the clock was ticking and our fear was not Mr. Xi,' he said, referring to Chinese President Xi Jinping. 'Our fear was American politicians.' Woldenberg, whose products include the popular Farmer's Market color sorting game and the Code and Go Robot Mouse sold online and at stores including Target and Walmart, said he sees no choice but to move manufacturing away from China. He's had tough conversations with long-term suppliers over the last several months. 'We've told our factories they need to move and we've told them that it's an urgent matter and we told them we have to move,' he said. 'I don't know where is safe. I can tell you that the wind is blowing in such a way that I don't feel secure in my future to have a manufacturer in China — I really don't.' At the start of 2025, about 60% of Learning Resources's products came from China, with the rest sourced from Taiwan, South Korea and elsewhere. That level, Woldenberg said, is 'low for our industry, but we now know not low enough.' While some see Trump's attempt to curb imports from China in the context of a superpower rivalry between the world's two biggest economies, manufacturers have yet to receive any direct state support. Officials are concerned about manufacturers' plans to lay off workers or shift overseas, but financial assistance is unlikely as local governments in China are grappling with high debt levels, said multiple Guangdong-based Chinese exporters and one government worker who have direct knowledge of such discussions, and who spoke on the condition of anonymity due to sensitivities around the issue. The Department of Commerce of Guangdong Province didn't reply to a faxed request for comment. The US and China agreed to maintain tariffs at their current, lower levels following discussions in London earlier this month. But Ah Biao no longer holds out hope that things between the US and China will improve in the longer term. 'It would be great if the two sides talk and make compromises, but it won't bother me much if it doesn't go well,' said Ah Biao. 'We've been through the worst.' That pushed Ah Biao to pull the trigger finally on his Vietnam move, and he isn't the only one. In the first quarter of this year, combined investment from China and Hong Kong into Vietnam reached nearly $2 billion, up 23% from the year before, according to Vietnamese government data. 'We are hearing from Chinese companies,' said John Dwyer, founder of Peregrine Management International, a Hanoi-based firm that assists companies looking to relocate to Vietnam. 'Their customers want to start production in Vietnam factories. They are looking for ways to de-risk themselves.' Shifting to Vietnam inevitably means that some of Ah Biao's workers must relocate, too. To sweeten the offer for his more senior employees, Ah Biao said that he may consider to raise their compensation by 50% at least, with guaranteed vacation time for them to go back to China to see their families. It's a big, and expensive, gamble for Ah Biao, but at 40, retirement is still too far away to contemplate folding. He thinks he's young enough to make big bets during a time of turmoil to scale up his business, but he has learned a valuable lesson of not putting all of one's eggs into one basket. 'I always tell my people that we should act like an 'unkillable cockroach,'' said Ah Biao. 'It's deeply embedded in our DNA.' --With assistance from John Boudreau, Linh Vu Nguyen, Yujing Liu and Allen K Wan. Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push How to Steal a House Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
