logo
Dollar wobbles near multi-year lows as investors brace for Trump tariff deadline

Dollar wobbles near multi-year lows as investors brace for Trump tariff deadline

CNA3 days ago
TOKYO :The dollar firmed against other major currencies on Monday, after remarks from U.S. officials offered little clarity on the outlook for tariffs, days ahead of a crucial deadline.
Most U.S. trade partners face the prospect of steeper duties at the end of the 90-day moratorium on U.S. President Donald Trump's "Liberation Day" reciprocal tariffs on Wednesday.
Trump clarified on Sunday that the new rates would take effect from August 1.
He said he will name some dozen countries later on Monday that are receiving letters with their new, higher levies, and he threatened an additional 10 per cent tariff on nations aligning with the "anti-American" policies of the BRICS emerging economies.
"It still feels like this administration is trying to find ways to avoid going all out on fresh tariff positions. We have people talking a (lot) about it, but talking and doing are two entirely different things," said Chris Beauchamp, chief market analyst at IG.
"They (the United States) saw what happened with the volatility in April, and I don't think they want to wish that again."
Options data reflected that currency markets were pricing in a limited resurgence in volatility ahead of the tariff deadline on expectations that there could be further extensions on the deadline.
The dollar inched up 0.2 per cent to 0.7972 Swiss franc on Monday, near the January 2015 low it revisited in the previous week.
The euro slipped 0.5 per cent to $1.1726 having rallied over 13 per cent so far this year. The dollar reversed an earlier decline and rose 0.54 per cent to touch a one-week high at 145.38 yen.
Investors are concerned that Tokyo and Brussels might not be able to secure deals with Washington ahead of the deadline as progress on agreements with Japan and the European Union has been slow, despite multiple rounds of negotiations.
The dollar index, which measures the currency against six major counterparts, rose 0.41 per cent to 97.363 and briefly hit a one-week high.
The index extended gains from last week when data reflecting labour market resilience pushed back expectations for imminent monetary policy easing by the Federal Reserve.
Still, the index is close to a 3-1/2-year trough and has declined 10 per cent so far this year as investors questioned the safe-haven status of the U.S. currency and reassessed earlier expectations that the U.S. could be spared in the event of a global economic slowdown.
On Monday, sterling weakened 0.26 per cent to $1.36, but stayed near its strongest level since October 2021. The U.S. dollar also gained about 0.4 per cent against the Canadian dollar.
Currencies positively correlated to risk appetite, such as the Aussie dollar and the New Zealand dollar lost 0.7 per cent and 1 per cent, respectively ahead of monetary policy decisions in both countries in the coming two days.
The Reserve Bank of Australia is widely expected to cut the cash rate by another quarter point on Tuesday, while New Zealand's central bank is predicted to hold rates steady on Wednesday.
U.S. policy uncertainty weighing on the dollar "may not be as potent as in early April, but we think this correlation still matters," Paul Mackel, global head of FX research at HSBC said.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Bank of Korea holds rates steady amid tariff, household debt concerns
Bank of Korea holds rates steady amid tariff, household debt concerns

Business Times

timean hour ago

  • Business Times

Bank of Korea holds rates steady amid tariff, household debt concerns

[SEOUL] South Korea's central bank held interest rates steady on Thursday, as policymakers steered a cautious path amid concerns about financial stability risks stemming from rising household debt and economic pressure from US tariffs. The Bank of Korea's seven-member monetary policy board voted to keep its benchmark interest rate unchanged at 2.50 per cent, an outcome expected by all 33 economists in a Reuters poll. Concerns of financial stability risks in Asia's fourth-largest economy have grown in recent months, driven by home prices and household debt rising sharply on lower interest rates, prompting policymakers to introduce stricter mortgage rules. Economists expect the central bank, which has lowered interest rates by a cumulative 100 basis points in the current easing cycle that started in October, to deliver at least one more rate cut of 25 basis points this year to underpin the economic recovery. The government last week adopted a second supplementary budget for the year with a cash handout scheme to boost domestic demand, as President Lee Jae Myung, who took office on June 4, prioritises shoring up an economy grappling with trade risks and tepid consumption. Earlier this week, US President Donald Trump ramped up the trade war he launched this year, telling partners, from powerhouse exporters such as Japan and South Korea to minor players, that they will face high tariffs from Aug 1. Governor Rhee Chang Yong will hold a press conference at 0210 GMT, which will be livestreamed via YouTube. REUTERS

Australia's beef exports to the US surge despite Trump tariffs
Australia's beef exports to the US surge despite Trump tariffs

Straits Times

timean hour ago

  • Straits Times

Australia's beef exports to the US surge despite Trump tariffs

Sign up now: Get ST's newsletters delivered to your inbox The US is the biggest market for Australia's almost A$14 billion beef and veal export sector. Australia's total beef exports to the US rose significantly in June in the face of US President Donald Trump's new tariff regime, which saw the American leader specifically single out Canberra for refusing to accept adequate red meat imports. Exports of chilled and frozen beef to the US jumped 23 per cent from June 2024 , according to Meat & Livestock Australia data released on J uly 10 . Shipments in the first six months were up almost a third from the same period in 2024 . The US is the biggest market for Australia's almost A$14 billion (S$11.7 billion) beef and veal export sector, and is one of America's largest foreign sources of red meat. Shipments to the US currently face a flat 10 per cent tariff, and Mr Trump singled out the nation for not buying enough US produce in the April press conference where he announced his administration's 'reciprocal' trade rates. Exports to China more than doubled from June 2024 and were just a third below those to the US, the July 10 data showed. Diplomatic tensions had hampered agricultural shipments between the two nations following the Covid-19 pandemic, although relations improved after the election of the centre-left Labor government in 2022, and trade has largely resumed. BLOOMBERG Top stories Swipe. Select. Stay informed. World Trump's ambassador nominee to Singapore Anjani Sinha has a rough day at Senate hearing Asia Dr Mahathir at 100: Still haunted by the Malay Dilemma Singapore Academic paper by NUS researchers withdrawn from peer review after hidden AI prompt found Singapore Apex court upholds SMC's conviction of doctor who gave patients unapproved hormones Multimedia 60 objects to mark SG60: Which is your favourite? Singapore Singaporean fugitive arrested in Thailand for suspected drug trafficking and handed over to CNB World Trump issues tariff notices to 7 minor trading partners, hits Brazil with 50% tariff Business SGX securities turnover up 23% in June, bringing financial year's gain to 28%

Japan's wholesale inflation slows, relieves interest rate-hike pressure
Japan's wholesale inflation slows, relieves interest rate-hike pressure

CNA

timean hour ago

  • CNA

Japan's wholesale inflation slows, relieves interest rate-hike pressure

TOKYO :Japan's annual wholesale inflation slowed in June for the third successive month, data from the Bank of Japan showed on Thursday, backing up the central bank's view that price pressure from rising raw material costs will gradually dissipate. While food prices continued to rise steadily, some analysts said they expect inflationary pressure to moderate in coming months as pain from U.S. tariffs on Japan's economy intensifies. "As wholesale inflation slows, consumer inflation will likely face stronger downward pressure with some lag," said Masato Koike, senior economist at Sompo Institute Plus. "Japan's trade talks with the U.S. seem deadlocked, so it will likely take time for uncertainty to fade. By then, consumer inflation will slow and make it hard for the Bank of Japan to raise interest rates," Koike said. The corporate goods price index, which measures the price companies charge each other for their goods and services, rose 2.9 per cent in June from the same month a year earlier, the data showed, matching a median market forecast. The index, a leading indicator of consumer inflation, slowed from a revised 3.3 per cent in May due partly to falling prices of fuel and metal products, the data showed. The yen-based import price index dropped 12.3 per cent in June from a year earlier, after a 10.3 per cent decline in May, indicating the currency's rebound pushed down raw material import costs. Food and beverage prices rose 4.5 per cent in June on stubbornly high cost of rice, though it slowed from a 4.7 per cent increase in May, the data showed. The BOJ ended a decade-long stimulus programme last year and in January raised its policy interest rate to 0.5 per cent on the view that inflation was on the cusp of durably meeting its 2 per cent target. While the BOJ expects food inflation to moderate this year, it has signalled readiness to raise the interest rate again once the economy resumes a recovery on solid wage gain. The core consumer inflation rate hit a more than two-year high of 3.7 per cent in May, remaining above the BOJ's 2 per cent target for well over three years, due largely to a surge in food costs.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store