Dollar slips before US data, eyes on Trump-Putin meeting
The yen outperformed the euro and the pound after surprising strong Japanese growth data which showed export volumes held up well against new U.S. tariffs.
All eyes will be on a meeting in Alaska later on Friday between U.S. President Donald Trump and his Russian counterpart Vladimir Putin, though hopes of sealing a ceasefire agreement on Ukraine remain uncertain.
U.S. import price figures will be more closely watched than usual after data on Thursday showed a surprisingly sharp jump in U.S. producer prices last month, pushing the dollar higher.
If import prices keep rising, it may signal that U.S. companies are fully absorbing the tariffs, leaving them with two options: pass the costs on to consumers, potentially stoking inflation, or take the hit to profit margins.
Money markets reflect a 95% chance of a 25-basis point Fed rate cut in September. They fully priced a 25-bp cut and a 5% chance of a larger 50-bp move before Thursday's U.S. data.
Markets also await next week's Jackson Hole symposium for clues on the Fed's next move. Signs of weakness in the U.S. labour market combined with inflation from trade tariffs could present a dilemma for the Fed's rate cut trajectory.
The yen was up 0.4% against the dollar at 147.20, helped by data showing Japan's economy grew much faster than expected in the second quarter.
U.S. Treasury Secretary Scott Bessent's remarks earlier this week that the Bank of Japan could be "behind the curve" in dealing with the risk of inflation proved to be another tailwind for the yen.
"Although BoJ Governor Ueda, may choose to disregard Bessent's remarks, the Japanese authorities will not want the value of the yen to become more of a concern to the Trump administration than it already is," said Jane Foley senior forex strategist at RaboBank.
The euro rose 0.25% versus the dollar to $1.1675.
Most analysts expect Europe's single currency to benefit from any ceasefire deal in Ukraine.
"The Trump-Putin meeting and any better clarity on the path ahead in the Ukraine conflict have longer-lasting implications for the euro than for the dollar," said Francesco Pesole, forex strategist at ING.
"There is a chance that today might be the first step in the direction of de-escalation, and markets may tread carefully for now," he added.
The pound was up 0.20% against the U.S. currency at $1.3553.
The Australian dollar was up 0.2% versus the greenback at 0.6508.
The Chinese yuan pulled back from a two-week high as weaker-than-expected economic readings weighed on sentiment.
Elsewhere, Bitcoin and ether rose after dropping about 4% each on Thursday. Bitcoin had at one point touched a record high on Thursday on shifting Fed rate-cut expectations.
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Reuters
10 minutes ago
- Reuters
War or peace? For oil markets, the Ukraine outcome is insignificant
LONDON, Aug 19 (Reuters) - U.S. President Donald Trump's high-stakes diplomacy to resolve the war in Ukraine is unlikely to jolt oil and gas markets, no matter the outcome. Russia has faced multiple rounds of western sanctions and restrictions since its invasion of Ukraine in February 2022, which have dealt severe blows to the country's giant oil and gas industry, sapping Moscow of vital revenue and reshaping global energy markets. Russian gas now accounts for just 18% of European imports, down from 45% in 2021, while the bloc's oil imports from Russia have fallen to 3% from around 30% over that time. The European Union plans to fully phase out Russian energy by 2027. Meanwhile, India has increased its share of Russian crude to 38% of total imports from 16% in 2021, according to Kpler. China and Turkey have also notably ramped up their Russian oil purchases. The war in Ukraine has left over a million dead or wounded, so its conclusion would be welcomed by many. Energy markets, however, are not apt to register much of a reaction unless there is a full ceasefire along with the lifting of all U.S. and European sanctions. And that is long shot. Given the more probable set of scenarios, oil and gas markets are unlikely to be rattled by the fallout from either last Friday's disappointing summit between Trump and Russian President Valdimir Putin or the U.S. president's meetingwith his Ukrainian counterpart Volodymyr Zelenskiy and European leaders on Monday. Full peace in Ukraine remains highly improbable. Trump's apparent support for a comprehensive settlement, rather than a ceasefire, has widened the gap between America, Ukraine and Europe. At the same time, his suggestion of U.S. post-settlement security guarantees for Ukraine is likely to face resistance from Moscow. In other words, don't bet on a full normalization of relations between Russia and the West any time soon. Trump might pressure Zelenskiy into accepting a temporary or partial halt in fighting. But even then, Europe is unlikely to resume Russian energy imports while Putin remains in power. Before 2022, Europe accounted for nearly half of Russia's 4.7 million barrels per day of oil exports and 75% of its gas exports, according to the U.S. Energy Information Administration. The Trump administration could attempt to ease some sanctions unilaterally, but this could face opposition in Congress, including from Republicans, unless a broad peace deal is reached. Perhaps the more likely scenario – Trump failing to broker a deal – also shouldn't have a major impact on energy markets. The U.S. could tighten sanctions, particularly by targeting buyers of Russian energy, as Trump has already threatened. But the U.S. president said on Friday that he would delay so-called "secondary sanctions" on China due to what he described as 'successful' talks with Putin. Of course, India already faces secondary tariffs over its Russian oil purchases. Earlier this month, Trump announced a 25% tariff on Indian goods, citing the country's continued oil imports from Russia. The new tariff, effective August 27, will bring total tariffs on Indian imports to 50%. But even though Indian buyers already appear to be reducing their Russian oil purchases, the impact on global supplies has been minimal as China has increased its intake of Russian crude. Ultimately, China matters far more in this story, and it's unlikely to significantly curb its Russian oil imports, not least because it considers its relationship with Moscow to be strategic. Chinese and Russian oil producers, refiners and traders have already built a sprawling network of tankers and insurers to circumvent Western sanctions on Venezuela, Iran, and Russia. Additionally, U.S. tariffs on Chinese goods already average 55%, according to the Peterson Institute for International Economics. Additional tariffs could raise costs for U.S. consumers, and Beijing could retaliate, potentially by withholding rare earths or other critical minerals, all outcomes Trump would want to avoid – and Beijing knows this. In short, Trump appears to have little stomach for the potential consequences, and even if he were to tighten sanctions, this likely wouldn't materially affect China's ability to import oil. Crucially, oil and gas markets appear to be entering a period of oversupply, meaning any possible disruption in Russian volumes can easily be offset. The IEA expects oil supply to exceed demand by 1.76 million barrels per day in 2025 and by 3 million bpd in 2026, driven by rising output from OPEC+ and the Americas. Global liquefied natural gas (LNG) markets are also expanding rapidly, with new supply coming online in the coming years across the U.S., Qatar, Canada, and elsewhere. LNG capacity is projected to grow from 500 million tons per year in 2024 to 800 mtpa by 2030, according to the International Energy Agency. While Trump's foreign policy remains unpredictable, a few things seem clear. He can't, as he once claimed, end the Ukraine war in one day, and what he can do is unlikely to have much of an impact on oil and gas markets. Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tab your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI, opens new tab can help you keep up. Follow ROI on LinkedIn, opens new tab and X., opens new tab
Daily Mail
10 minutes ago
- Daily Mail
Zelensky's master stroke to win over Trump and avoid another White House debacle as he seeks US help to bring peace in Ukraine
Volodymyr Zelensky delivered a masterful charm offensive to win over President Donald Trump and set up a potential meeting with Vladimir Putin to end the years long war in Ukraine. Trump hyped a face-to-face meeting between Putin and Zelensky after he called the Russian leader following a dramatic summit in the White House with European leaders. The potential peace deal immediately drew skeptics, as French President Emmanuel Macron said he did not 'see President Putin very willing to get peace now.' He laid the groundwork by offering a $100 billion weapons deal as an olive branch to Trump. The Ukrainian leader also donned corporate attire in accordance with a more nuanced approach to handling the professionally dressed US president. The Ukrainian leader clearly learned several lessons from his last visit to Washington, which led to a bitter confrontation with Trump and Vice President JD Vance. Zelensky had the backing of several European leaders this time, including the UK's Keir Starmer, Italy's Giorgia Meloni and France's Emmanuel Macron. The heads of state had coached him prior to speaking to Trump, The Times reported. He may have either taken their advice or the withering counsel of Vice President Vance from the last time they met, as he was immediately complimentary of and thankful for Trump. In fact, The Washington Post noted that Zelensky thanked Trump approximately 11 times in a nearly five-minute public address Monday. He thanked Trump another seven times in 50 seconds as they addressed the press in the Oval Office, the site of their infamous showdown in March. 'Thanks so much, Mr President. If I can, first of all, thank you for the invitation, and thank you very much for your efforts, personal efforts, to stop killings and stop this war. Thank you,' Zelensky said. Beyond pleasantries, Zelensky had come prepared to speak in the language that Trump made famous: the art of the deal. He announced that Ukraine plans to buy $100billion in American weapons in exchange for the 'major step forward' toward peace Zelensky believes Trump has offered. The European allies will be helping Ukraine finance the deal, as well as a $50billion deal between Washington and Kyiv to help Ukrainian companies produce drones, The Financial Times reported. Trump told Zelensky on Monday that the United States would help guarantee Ukraine's security in any deal to end Russia's war there, though the extent of any assistance was not immediately clear. 'When it comes to security, there's going to be a lot of help,' Trump told reporters, adding that European countries would be involved. 'They are a first line of defense because they're there, but we'll help them out.' Trump hyped a face-to-face meeting between Putin and Zelensky after he called the Russian leader following a dramatic summit in the White House with European leaders Trump refused three times to rule out putting American boots on the ground though any assistance is more likely to come in the form of air support. Zelensky hailed the promise as 'a major step forward,' adding that the guarantees would be 'formalized on paper within the next week to 10 days.' However, Zelensky clearly saw charming the president as key to getting any deals done. He borrowed a move from Starmer, who received compliments from Trump in February after he presented the president with a letter from King Charles. This letter was instead from Zelensky's wife, Olena, addressed to Trump's wife, First Lady Melania. 'It's very nice,' said Trump. Zelensky corrected: 'It's not to you, it's to your wife, about our children, our abducted children.' 'Oh, I want it,' Trump replied, before praising his wife in self-deprecating fashion. 'She's got a great love of children. She has a wonderful son that she loves, probably more than anyone including me, I hate to say it.' He also gave Trump credit for bringing peace to other parts of the world which led to perhaps the most important aesthetic change Zelensky made between now and his last visit. Brian Glenn - the journalist and boyfriend of Marjorie Taylor Green who slammed Zelensky for not wearing a suit months earlier - pointed out how Trump's federal intervention had made Washington DC a more peaceful place. 'If I can walk around with MTG and not be attacked, this city is safe,' Glenn said, which led Trump to reintroducing the pair. 'President Zelensky, you look fabulous in that suit,' Glenn noted. Trump added: 'I said the same thing. This is the one that attacked you last time, you remember that?' 'I remember,' Zelensky replied. Glenn said: 'I apologize to you, you look wonderful.' In a far more light-hearted encounter than their previous meeting, Zelensky noticed how Glenn was wearing a similar outfit to the last time the two met. 'But you are in the same suit,' Zelensky shot back. 'You see, I changed you [did] not.' The reply was followed by laughter from fellow members of the press, before Glenn replied: 'Maybe yours is much better than mine.' Trump initially declared himself 'very happy' and hyped up plans for a historic showdown between Zelensky and Putin after a 40-minute phone call with the Russian leader. However, Putin has failed to commit to peace talks with Zelensky - fueling fears he will pull out of efforts to end the Ukraine war at the last minute. It comes as the Kremlin branded a 40-minute phone call between President Trump and Putin on Monday as 'frank' and only 'fairly constructive'. Putin's aide Yuri Ushakov made the comments as he confirmed the pair had explored 'raising the level of representatives of Moscow and Kyiv at the talks'. Furthermore, the leaders of both Finland and France have declared their skepticism in Putin making a deal. Speaking after he left Trump's historic talks in the White House with Zelensky and other European leaders, Alexander Stubb said: 'Putin is rarely to be trusted. 'So now it remains to be seen whether he has the courage to come to this type of meeting. 'Does he have the courage to come to a trilateral meeting, or is he once again playing for time?' Macron, speaking to NBC News, praised the president's optimism but was similarly wary of Putin. 'When I look at the situation and the facts, I don't see President Putin very willing to get peace now,' he said. 'But I think this is great news, and indeed, your president is very confident about this capacity to get this deal done with President Putin, and it's great,' Macron added. Their rhetoric was in stark contrast to that of President Trump who hailed the success of Monday's talks in the White House. The president said on social media Monday that he and Putin discussed plans for a summit between the leaders of Russia and Ukraine, at a location to be determined. Following that diplomatic showdown, Trump said he will then sit down with both leaders in an attempt to make peace in the war torn country. 'This was a very good, early step for a War that has been going on for almost four years,' he said. Zelensky responded by saying 'we are ready' for any leader-level meetings while speaking to reporters after the White House. He said it's the only way to solve these 'complicated and painful issues.' The Ukrainian leader was reluctant to set conditions for the meeting, regarding a potential ceasefire or other matters, to prevent Russia from making their own demands, potentially jeopardizing those talks. 'That's why I believe that we must meet without any conditions,' he told reporters. Zelensky said Trump showed him a map of the Ukraine front lines in the Oval Office and they got into a little debate about territories it showed. But they didn't argue, he said. 'We had a truly warm, good and substantial conversation,' Zelensky said. No date has been set for him and Putin to meet, he said, though German Chancellor Friedrich Merz said afterward that Trump and Putin agreed there will be a meeting 'within the next two weeks.' Trump revealed that Vice President JD Vance, Secretary of State Marco Rubio and special envoy Steve Witkoff are coordinating with Russia and Ukraine. 'During the meeting we discussed Security Guarantees for Ukraine, which Guarantees would be provided by the various European Countries, with a coordination with the United States of America. Everyone is very happy about the possibility of PEACE for Russia/Ukraine,' Trump wrote on Truth Social. 'At the conclusion of the meetings, I called President Putin, and began the arrangements for a meeting, at a location to be determined, between President Putin and President Zelensky. After that meeting takes place, we will have a Trilat, which would be the two Presidents, plus myself.' Monday's meeting, which was praised by Zelensky as the best he had with Trump, saw the two presidents swap praises as they sought to make progress towards peace. However, lots of questions remained unanswered early on Tuesday morning as to what that would look like or how it would come about. The hastily arranged scenes at the White House saw a contingent of European leaders, including Starmer, put summer holiday plans to the side and arrive at the West Wing to stand with Zelensky. They were locked in talks on Monday night as Trump pledged they would 'come to a resolution today on almost everything, including probably security'. He had earlier spent an hour with just his Ukrainian counterpart, presenting him with a giant battlefield map showing the 20 per cent of the country under Russian control. The 'possible exchanges of territory, taking into consideration the current line of contact' was up for discussion, the President said. Trump told reporters: 'If everything works out well, we will have a tri-lat [between himself, Zelensky and Putin] and have a good chance of ending the war.' Responding calmly to a provocative first question from an American journalist over whether he is prepared 'to keep sending Ukrainian troops to their deaths', Zelensky said he was ready to sit down with Putin. 'We support the idea of the United States, of personally President Trump, to stop this war, to make a diplomatic way of finishing this war', he said. 'And we are ready for a trilateral, as the president said. 'This is a good signal about trilateral. I think this is very good.' It was a complete contrast from their meeting nearly six months ago, when Trump abruptly halted peace talks between Russia and Ukraine and kicked President Zelensky out of the White House after a blistering Oval Office shouting match between the two leaders. The unprecedented scene left Ukraine's future in doubt as the country fights for its life. Tempers flared on all sides during the February Oval Office showdown. Trump threatened to abandon Ukraine completely if Zelensky did not agree to his peace terms. He also accused Zelensky of not being grateful. Zelensky held his own, even showing Trump photos he brought of the devastation to his country, and arguing he had thanked the American people. The yelling match was unlike anything ever seen publicly in the Oval Office. And it played out on TV screens across the world. 'You're gambling with World War III,' Trump bellowed Zelensky at one point. After the contentious meeting Trump announced he had asked Zelensky to leave. In a post on Truth Social, Trump wrote:. 'It's amazing what comes out through emotion, and I have determined that President Zelensky is not ready for Peace if America is involved. 'Because he feels our involvement gives him a big advantage in negotiations. I don't want advantage, I want PEACE. He disrespected the United States of America in its cherished Oval Office. He can come back when he is ready for Peace.' After the cameras left the Oval Office, Zelensky went to a holding room in the West Wing. He and Trump did not meet again. Trump issued his statement. National Security Advisor Michael Waltz and Secretary of State Marco Rubio, who were in the Oval Office meeting, went and told Zelensky his meetings at the White House were over, a White House official said. The two leaders never had their scheduled lunch. White House reporters saw it sitting in the hallway outside the Oval Office, untouched. Trump and Zelensky had been scheduled to participate in a press conference later Friday. That was canceled. However, tempers soon calmed down with the pair meeting at Pope Francis' funeral
The Guardian
10 minutes ago
- The Guardian
SoftBank invests $2bn in Intel; proposed new UK property tax ‘could cut cost of buying expensive homes'
Update: Date: 2025-08-19T06:46:18.000Z Title: Introduction: SoftBank invests $2bn in Intel; proposed new UK property tax 'could cut cost of buying expensive homes' Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Japan's SoftBank has agreed to invest $2bn (£1.48bn) in Intel, the struggling US chip company, while the Trump administration is reportedly considering a 10% stake in the business by converting Chips Act subsidies into equity. That would make Washington Intel's largest shareholder. The Japanese technology investor announced its multi-billion dollar deal, amounting to a 2% stake in Intel, on Tuesday, describing Intel as a 'trusted leader in innovation'. Intel shares fell by 5% while SoftBank shares were down 4%, retreating from all-time highs. Masayoshi Son, SoftBank's chairman and chief executive, said: Semiconductors are the foundation of every industry. For more than 50 years, Intel has been a trusted leader in innovation. This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role. All eyes were on Washington yesterday, where Donald Trump met with Volodymyr Zelenskyy and seven European leaders to discuss a peace deal in Ukraine. According to Trump, Vladimir Putin wants to do face-to-face talks with the Ukrainian president, although Moscow has not confirmed the meeting. (Trump called Putin during his meeting with the Europeans, but some experts are sceptical.) Traders are cautious, with most Asian stock markets slightly lower. Japan's Nikkei fell by 0.4% while Hong Kong's Hang Seng dropped by 0.3%. Here's some reaction to our scoop yesterday that the UK Treasury is considering a new tax on the sale of homes worth more than £500,000 as a step towards a radical overhaul of stamp duty and council tax. David Fell from Hamptons told the Times: Who is better off will come down to how closely the government chooses to follow any recommendations. But I think in response to the general principle, the shift would probably cut the cost of buying the most expensive homes, but add to the annual cost of ownership, particularly given the artificially low levels of council tax charged by many places that have the most expensive house prices. The impact of a change to the system would probably depend on the level at which the rates were set, and the length of time it takes for the higher ownership charges to outweigh existing stamp duty and council tax bills. The Agenda 1.30pm BST: Canada inflation for July 1.30pm BST: US Housing starts for July
