Dollar edges lower after U.S. credit downgrade, Aussie pares losses before Reserve Bank of Australia
The greenback advanced 0.6% against major counterparts last week after a temporary trade truce between the United States and China eased fears of a global recession. But economic data pointed to rising import prices and waning consumer confidence.
Moody's cut America's top sovereign credit rating by one notch on Friday, the last of the major ratings agencies to downgrade the country, citing concerns about the nation's growing $36 trillion debt pile.
"The focus on U.S. growth risks and the U.S. administration's policy agenda may have put the U.S. safe-haven status in question," said Mahjabeen Zaman, head of foreign exchange research at ANZ.
U.S. Treasury Secretary Scott Bessent said in television interviews on Sunday that President Donald Trump will impose tariffs at the rate he threatened last month on trading partners that do not negotiate in "good faith."
Meanwhile, Trump is facing resistance within his own party in pushing forward a sweeping tax cut bill that would add an estimated $3 trillion to $5 trillion to the nation's debt over the next decade.
The dollar lost 0.3% to 145.22 yen. The greenback was also 0.2% lower against the Swiss franc, another safe-haven counterpart.
The Australian dollar edged up 0.1% to $0.6409 after three days of losses. Markets have priced in a certainty for a quarter-point cut in the Reserve Bank of Australia's 4.10% cash rate on Tuesday.
The euro stood at $1.1185, up 0.2%. Sterling traded at $1.3299, up 0.1%.
New Zealand's kiwi dollar rose 0.1% to $0.5888.
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33 minutes ago
Asian shares retreat after Trump's order imposing new tariffs on 68 countries and the EU
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Asian shares retreat after Trump's order imposing new tariffs on 68 countries and the EU
MANILA, Philippines (AP) — Asian shares retreated Friday following choppy trading on Wall Street that saw more losses as investors assess President Donald Trump's order imposing new tariffs on 68 countries and the European Union starting in seven days. Trump's order, which pushed back the tariff deadline earlier set on Aug. 1, has injected a new dose of uncertainty in an already uncertain process. Japan's Nikkei 225 slid 0.4 % to 40,914.66 while South Korea's Kospi tumbled 2.8% to 3,154.53. Hong Kong's Hang Seng index trimmed earlier losses, shedding 0.2% to 24,726.38, while the Shanghai Composite slipped 0.1% to 3,570.21. Australia's S&P ASX 200 shed 0.8% to 8,676.80, India's BSE Sensex fell 0.4% to 81,185.58 and Taiwan's TAIEX slid 0.4% to 23,453.56. 'US and European equity futures are pointing negative, Asian stocks are taking a beating and the DXY index is still rising,' Benjamin Picton, senior market strategist at Rabo Bank, said in a commentary about Trump's new order updating reciprocal tariff rates. 'The USA is cherry-picking high value-add industry for its own economy while forcing trading partners to grant preferential market access for its exports and supply it with cheap imports. Make no mistake, this is imperial trade,' he added. Mizuho Bank noted in 'somewhat a turn of the tables, Asia (and in particular Southeast Asia) which was harder hit post-'Liberation Day' now appear to be in a better position by virtue of tariffs differentials though intra-regional differences remain small.' On Wall Street on Thursday, stocks capped the trading day with more losses after an early big tech rally faded and a health care sector pullback led the market lower. The S&P 500 fell 0.4%, its third straight decline. The benchmark index, which is just below the record high it set Monday, notched a 2.2% gain for the month of July and is up 7.8% so far this year. The Dow Jones Industrial Average lost 0.7% and the Nasdaq composite closed less than 0.1% lower. Roughly 70% of stocks in the S&P 500 lost ground, with health care companies accounting for the biggest drag on the market. Health care stocks sank after the White House released letters asking big pharmaceutical companies to cut prices and make other changes in the next 60 days. Eli Lilly & Co. fell 2.6%, UnitedHealth Group slid 6.2% and Bristol-Myers Squibb dropped 5.8%. Gains by some big technology stocks with hefty values helped temper the impact of the broader market's decline. Meta Platforms surged 11.3% after the parent company of Facebook and Instagram crushed Wall Street's sales and profit targets even as the company continues to pour billions of dollars into artificial intelligence. Microsoft climbed 3.9% after posting better results than analysts expected. The software pioneer also gave investors an encouraging update on its Azure cloud computing platform, which is a centerpiece of the company's artificial intelligence efforts. Big Tech companies have regularly been the driving force behind much of the market's gains over enthusiasm for the future of artificial intelligence. In other dealings Friday, U.S. benchmark crude oil lost 5 cents to $69.21 per barrel, while Brent crude, the international standard, shed 3 cents to $71.67 per barrel. The U.S. dollar climbed to 150.68 Japanese yen from 150.67 yen. The euro rose to $1.1418 from $1.1421.
