
US dollar slumps as Trump's tariff deadline looms
Trading was mostly subdued, with the Japanese currency advancing for a second straight session following results from a weekend upper house election in Japan that had already been priced in. The focus has shifted to how quickly Tokyo can strike a trade deal with Washington as well as on Prime Minister Shigeru Ishiba's future at the helm.
In afternoon trading, the dollar fell 0.5 per cent to 146.54 yen, having fallen more than 1 per cent on Monday following the weekend election and a public holiday. The U.S. currency has retreated for two straight sessions against the yen.
With little over a week to go before August 1, U.S. Treasury Secretary Scott Bessent said on Monday the administration is more concerned with the quality of trade agreements than their timing.
Asked whether the deadline could be extended for countries engaged in productive talks with Washington, Bessent said President Donald Trump would make that decision.
"Markets are ... looking through that noise (August 1 tariff deadline) until something actually definitive happens," said Brad Bechtel, global head of FX, at Jefferies in New York.
"And a lot of the data has actually been looking okay even with all the tariffs, at least those that have been implemented already."
Uncertainty over the eventual state of tariffs globally has been a huge overhang for the foreign exchange market, leaving currencies trading in a tight range for the most part, even as stocks on Wall Street have scaled fresh highs.
The dollar index, a gauge of its value against a basket of currencies, slipped 0.3 per cent to 97.545, having weakened around 0.6 per cent on Monday. It hit a two-week low earlier in the session.
The euro edged up 0.2 per cent to $1.1725, with the European Central Bank also in the mix this week for central bank meetings. It is not expected to adjust euro zone interest rates, however. The single currency rose to two-week highs earlier in the global day.
A deal between the European Union, which could face 30 per cent tariffs from August 1, and the United States remains elusive. EU diplomats said on Monday they were exploring a broader set of possible counter-measures given fading prospects for an agreement.
"The dollar's early-month recovery is running out of momentum, the euro is flat-lining ahead of Thursday's placeholder central bank meeting, and the Japanese yen is consolidating gains achieved after the weekend's better-than-feared election results," said Karl Schamotta, chief market strategist, at Corpay in Toronto.
"Trading ranges are narrowing against a relatively-quiet data backdrop. Positioning across a range of trading pairs is moving into neutral territory, and gauges of implied volatility are ratcheting lower. "
Also weighing on investors' minds were worries about Federal Reserve independence, given Trump has repeatedly railed against Chair Jerome Powell and urged him to resign because of the central bank's reluctance to cut interest rates.
Bessent on Monday took a softer stance, saying that there is no need for Powell to step down immediately, adding that he should see through the end of his term in May if he wants.
"You can criticize the Fed for many of its policy moves over the years. But pushing the Fed chair out because he won't follow White House instructions is a step too far," wrote Kathy Jones, senior fixed income strategist, at Schwab in a research note.
"It will undermine confidence in the central bank at a time when inflation is still too high, and policy is a confusing mix of priorities. If Powell is replaced by someone who is seen as doing the administration's bidding, it would likely lead to a weaker dollar and much higher long-term interest rates."
Currency
bid
prices
at 22
July
07:25
p.m. GMT
Descript RIC Last U.S. Pct YTD High Low
ion Close Chang Pct Bid Bid
Previous e
Session
Dollar 97.37 97.847 -0.48 -10.25 97.994 97.
index per cent per cent 305
Euro/Dol 1.175 1.1699 0.43 per cent 13.49 per cent $1.176 $1.
lar 1 167
8
Dollar/Y 146.52 147.3 -0.52 -6.87 per cent 147.93 146
en per cent .35
Euro/Yen 172.18 172.31 -0.08 5.49 per cent 172.93 171
per cent .37
Dollar/S 0.7924 0.798 -0.63 -12.62 0.7988 0.7
wiss per cent per cent 92
Sterling 1.3529 1.3492 0.28 per cent 8.18 per cent $1.353 $1.
/Dollar 2 346
3
Dollar/C 1.3609 1.3681 -0.51 -5.35 per cent 1.3695 1.3
anadian per cent 606
Aussie/D 0.6552 0.6525 0.42 per cent 5.9 per cent $0.655 $0.
ollar 8 650
5
Euro/Swi 0.9311 0.9329 -0.19 -0.87 per cent 0.9337 0.9
ss per cent 308
Euro/Ste 0.8682 0.8665 0.2 per cent 4.94 per cent 0.8693 0.8
rling 664
NZ 0.6 0.5968 0.5 per cent 7.2 per cent $0.600 0.5
Dollar/D 5 942
ollar
Dollar/N 10.0709 10.1541 -0.82 -11.39 10.195 10.
orway per cent per cent 6 072
2
Euro/Nor 11.8342 11.8698 -0.3 per cent 0.55 per cent 11.92 11.
way 833
Dollar/S 9.5113 9.5745 -0.66 -13.67 9.6069 9.5
weden per cent per cent 079
Euro/Swe 11.1762 11.1985 -0.2 per cent -2.54 per cent 11.226 11.
den 5 174
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
21 minutes ago
- Business Times
Japan expects only 1% to 2% of $550 billion US fund to be investment
[TOKYO] Japan expects only 1 to 2 per cent of its recently agreed upon US$550 billion US fund to be in the form of actual investment, with the bulk of it being loans, according to the nation's top chief negotiator Ryosei Akazawa. At the same time, Tokyo would save roughly 10 trillion yen (S$87 billion) through lower tariff rates in its deal with America, he said. The US$550 billion investment framework will be a combination of investments, loans and loan guarantees provided by financial institutions backed by the Japanese government, Akazawa said on public broadcaster NHK on Saturday (Jul 26) night. Of the total, investment would be worth 1 per cent or 2 per cent and the US and Japan would split the profits of that investment at a ratio of 90-10, he said. Japan had originally proposed a 50-50 ratio, he added. The fund is a centrepiece of the deal announced by the two sides that will impose 15 per cent tariffs on Japanese cars and other goods. But the details given by Akazawa suggest the Japanese may end up giving up much less than at first glance. The comments come as officials from countries with deals with the US sift through the terms to explain to the public what they entail. 'It's not that US$550 billion in cash will be sent to the US,' Akazawa said. 'By letting the US have 90 per cent of the profits rather than 50 per cent, I think Japan's loss will be at most a couple of tens of billions of yen. People are saying various things, such as 'You sold out Japan', but they are wrong.' For the loans provided through the programme, Japan will simply be collecting the interest payments, and for the loan guarantees, if nothing happens, Japan will also be just collecting fees, Akazawa said. 'For that part, Japan's just making money,' he said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Akazawa also clarified that the investment programme will not be only supporting Japanese and US firms. As a potential example, he cited a Taiwanese semiconductor firm building a factory in the US. 'We'd like to put the US$550 billion in place during President Trump's term,' Akazawa added. Further details of the implementation of the US-Japan deal remain unclear, including when the new tariff rates would take effect and when the new investment vehicle would kick off. There's been no joint document signed by both sides for the deal, although the White House has published a fact sheet. 'If you say something like, 'Let's create a joint document,' they will say, 'We will lower tariffs after the document is created,'' Akazawa said. In order not to lose time, 'we will demand that they issue an executive order to lower tariffs as soon as possible, regardless of a document'. Last week, Akazawa said that he expects universal tariffs on Japan's shipments to be lowered to 15 per cent on Aug 1, while he said he wanted the car tariffs to be cut to 15 per cent as soon as possible without specifying a date. The Trump administration has touted the deal with Japan as a potential model for others. On Sunday, the US and European Union agreed on a deal that will see the bloc face 15 per cent tariffs on most of its exports, with the EU pledging to invest US$600 billion in the US. BLOOMBERG
Business Times
an hour ago
- Business Times
Trade talks with US in trouble as Thai-Cambodia conflict escalates
[BANGKOK] After months of uncertainty over the tariff fate imposed on its exports to the US, a deadly border clash between Thailand and Cambodia has now added fresh geopolitical risk to an already tense trade standoff as Bangkok scrambles to avoid punishing new duties. Fighting broke out on Jul 24 along the Thai-Cambodian border, killing at least 32 people and displacing over 200,000 civilians. The violence comes as Thailand struggles to finalise a trade agreement with Washington, even as regional peers like Indonesia, Vietnam and the Philippines have secured deals that cap US tariffs at 19 to 20 per cent. Both Thailand and Cambodia, which run sizeable trade surpluses with the US, face tariffs of 36 per cent on their exports to the American market starting Aug 1 if no deal is struck. For Thailand, one of the most export-reliant economies in the region, such a steep rate – among the highest globally – would deal a heavy blow to its already faltering economy. US President Donald Trump on Saturday said both sides had agreed to a ceasefire, following calls with Cambodian Prime Minister Hun Manet and Thailand's acting Prime Minister Phumtham Wechayachai. He added on Truth Social: 'They are also looking to get back to the 'Trading Table' with the United States, which we think is inappropriate to do until such time as the fighting STOPS.' Although fighting continued, both sides reportedly agreed to let Malaysia, Asean's current chair, mediate the conflict. According to reports, the two prime ministers are expected to travel to Malaysia on Monday for initial talks. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Growth on the line Economists had already projected GDP growth of less than 2 per cent this year under a best-case scenario of 10 to 20 per cent US tariffs. That forecast is now expected to be downgraded to below 1 per cent if the full 36 per cent rate takes effect. Thailand's economy remains heavily export-driven, recording around US$300 billion in exports last year. The US accounted for 18 per cent of those shipments – one of the highest shares in Asean, behind only Vietnam and Malaysia. During the first six months of 2025, Thailand's exports grew 15 per cent year-on-year, with much of that attributed to front-loading by US clients. Exports to the US were up 41.9 per cent in June. Thailand's second main engine of economic growth is tourism, a sector now facing fresh headwinds as a sharp drop in Chinese visitors, spooked by security concerns, has been further compounded by the border conflict. The kingdom's tourism arrivals in the second quarter fell 12 per cent year on year, after falling 5 per cent in Q1 of FY2025, driven by weakness from North Asia, Southeast Asia, the Middle East and China (down 40 per cent), according to government figures. Arrivals are expected to reach 32-33 million, compared with 35 million in 2024. Sluggish domestic factors And unlike many neighouring countries, Thailand's domestic consumption remains sluggish, crippled by high household debt (88 per cent of GDP), which cuts into spending. 'If you cannot improve your competitiveness in the export sector, and you have high household debt, it constrains your ability to build your economy through domestic channels because already people have to pay a lot of their incomes to service their debt,' said Kim Eng Tan, Senior Director for Asia Pacific sovereign ratings at S&P Global Ratings, at a recent Bangkok conference. While Thailand has a well-diversified range of export items, including automobiles and auto parts, agricultural commodities, processed foods, electrical appliances and electronics, it has lagged in moving up the value-added ladder in electronics, nowadays the main driver of export success. In this sector Thailand already faces stiff competition from Asean neighbours, which now look like they will face lower tariff rates in the important US market. 'The impact of tariffs on Thailand will actually depend on the tariffs imposed on its competitors,' said Louis Kuijs, chief economist for Asia-Pacific at S&P Global Ratings, speaking at the same event. Most of the Asean economies are competitive in the US market, so it matters less how competitive Thailand is compared to US factories – which are unlikely to reopen – and more how it stacks up against other Asean exporters. Thailand is also competing with China in the US market. 'A lot depends on the tariff rate on China as it is Thailand's main competitor in the US market,' said Kirida Bhaopichitr, Research Director at the Thailand Development Research Institute. 'China is Thailand's main competitor in 18 of the top 20 Thai exports to the US,' she pointed out. The final tariff rate on China is expected to be announced on Aug 11. Political risks Thailand's future efforts secure a deal with the US are further complicated by its own political disarray, which the conflict with Cambodia has added to. Thai Prime Minister Paetongtarn Shinawatra was suspended from her post by Thailand 's Constitutional Court on Jul 1, after a supposedly private conversation with former Cambodian leader Hun Sen was leaked, in which she called him 'uncle' and criticised the Thai commander of the border region. Paetongtarn is the daughter of Thaksin Shinawatra, a former prime minister and billionaire businessman once known to have close personal ties with Hun Sen. Thailand's political scene has arguably been shaky for the past two decades, with much of the divisiveness centered around power struggles between powerful politicians, such as Thaksin, and the elites identified with royalists, the military and entrenched business groups. 'We have to wait for a government that is able to get its policy vision lengthened to the extent that it is able to implement polices to deal with some of the problems,' said S&P's Tan. He added, 'But this development (US tariffs) is not likely to change the metrics in such a way that we may have to change our outlook, because overall the Thai metrics are still quite resilient. But it is not helpful.'


CNA
an hour ago
- CNA
Musk says Tesla, Samsung Electronics sign chip supply deal
SEOUL :Tesla CEO Elon Musk said on Monday that the U.S. automaker has signed a deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla was the customer for the deal. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.63 billion) in the first half of the year. Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers. The Samsung-Tesla deal is also significant for South Korea, which is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 per cent U.S. tariffs. It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it struggles to win major customers. Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said.