Friendshoring Set to Benefit European Battery Maker says CEO
Friendshoring Set to Benefit European Battery Maker says CEO "Geopolitical tension is playing to our strength," says Lars Christian Bacher, CEO of Norway-based battery manufacturer Morrow. Despite facing competition on price from Asia, customers "are willing to pay more" for diversification, he adds. Bacher speaks with Anna Edwards and Lizzy Burden on 'Bloomberg: The Opening Trade'. (Source: Bloomberg)
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CNBC
11 minutes ago
- CNBC
Russia's ruble rockets: The curious case of the world's best-performing currency this year
In the midst of a long-drawn war, declining oil prices, stiff sanctions, and an economy that's on the downhill, Russia's ruble has been rising. In fact, it is the world's best-performing currency so far this year, according to Bank of America, with gains of over 40%. The ruble's stunning rally in 2025 marks a sharp reversal from the past two years when the currency had depreciated dramatically. What's powering the Russian currency? The strength in the ruble has less to do with a sudden jump in foreign investors' confidence than with capital controls and policy tightening, market watchers told CNBC. The weakness in the dollar comes as an added bonus. Brendan McKenna, international economist and foreign exchange strategist at Wells Fargo, lists three reasons for the ruble's rally. "The central bank has opted to keep rates relatively elevated, capital controls and other FX restrictions have tightened a bit, and [there's been] some progress or attempt at progress in finding a peace between Russia and Ukraine." Russia's central bank has maintained a restrictive stance to curtail high inflation, keeping domestic interest rates high at 21% and tightening credit. The steep borrowing costs are deterring local businesses from importing goods, in turn reducing demand for foreign currency among Russian businesses and consumers, said industry watchers. There's been a decline in foreign currency demand from local importers, given weak consumption and the adequate supply of ruble, said Andrei Melaschenko, an economist at Renaissance Capital. That decline has given the ruble a boost as banks don't need to sell rubles to buy the dollar or yuan. Russian exporters need to be paid in rubles, or at least convert dollar payment into rubles, thereby increasing demand. Importers, on the other hand, have stopped purchasing foreign goods, and so do not need to sell rubles to pay in dollars. In the first quarter of 2025, there was an "overstocking" in consumer electronics, cars and trucks which were actively imported in the second half of last year in anticipation of the increase in import duties, said the Moscow-based economist. The consumer activity cooldown was primarily in the durable goods sector, which made up a sizable portion of Russia's imports, Melaschenko said. Another key reason the Russian ruble has strengthened this year is that Russian exporters, in particular the oil industry, have been converting foreign earnings back into rubles, analysts said. The Russian government requires large exporters to bring a portion of their foreign earnings back into the country and exchange them for rubles on the local market, according to the government. Between January and April, the sales of foreign currencies by the largest exporters in Russia totaled $42.5 billion, data from CBR showed. This is almost a 6% jump compared to the four months before January. CBR shrinking money supply is also supporting ruble, said Steve Hanke, professor of applied economics at Johns Hopkins University. In August 2023, the rate of growth in the money created by the CBR was soaring at 23.9% per year, he said. This figure has turned negative since January — currently contracting at a rate of -1.19% per year, said Hanke. Further, hopes for a peace deal between Ukraine and Russia following the election of U.S. President Donald Trump had also sparked some optimism, said Wells Fargo's McKenna. Expectations of Russia's reintegration into the economy had prompted some capital flows back into ruble-denominated assets, in spite of the capital controls, which have supported the currency's strength to some extent. Despite the ruble's current strength, analysts caution that it may not be sustainable. Oil prices—a major pillar of Russia's export economy — have fallen significantly this year, which could weigh on FX inflows. "We believe that the ruble is close to its maximum and may begin to weaken in the near future," Melaschenko said. "Oil prices have fallen significantly, which should be reflected in a decrease in export revenue and the sale of its foreign currency component," he added. While peace talks between Russia and Ukraine recently have not wielded any concrete developments, McKenna also noted that a concrete peace deal could erode ruble's strength as the controls such as the FX restrictions that have supported the currency might be lifted. "Ruble can selloff pretty rapidly going forward, especially if a peace or ceasefire is reached," he said. "In that scenario, capital controls probably get fully lifted and the central bank might cut rates rather quickly," he added. Exporters are also seeing slimmer margins, industry analysts noted, in particular the country's oil sector against the backdrop of declining global oil prices. The government, too, is feeling the squeeze — lower oil prices combined with a stronger ruble are eroding oil and gas revenues. The government's finances are highly sensitive to fluctuations in crude prices, with oil and gas earnings making up around 30% of federal revenues in 2024, according Heli Simola, senior economist at the Bank of Finland. "The Ministry of Finance has been forced to lean more heavily on the National Welfare Fund to cover spending," Melaschenko said. "And there may be further cuts to non-priority expenditures if this trend continues." That said, aside from the oil trade, Russia has been mostly isolated from the global marketplace. "Meaning, a weaker RUB does not add much to Russia's trade competitiveness," said McKenna.
Yahoo
17 minutes ago
- Yahoo
Loblaw pulls Folgers coffee from shelves over 'unjustified' cost increases
Shoppers at Loblaw Cos. Ltd.'s stores will soon no longer be able to get a coffee fix by purchasing Folgers-brand products after a pricing dispute prompted the grocer to pull them from its shelves. In an email sent to retailers on Wednesday, Loblaw said it decided to delist all Folgers products after talks with the coffee maker's manufacturer couldn't solve the impasse. "After several weeks of negotiations, we were unable to reach an agreement with the manufacturers of Folgers coffee regarding their significant and unjustified proposed price increases," said the email signed by Loblaw category director Suren Theivakadacham and obtained by The Canadian Press. "We are doing this because we are on the side of customers, and doing what we can to keep prices low ... This decision to delist Folgers coffee reflects our commitment to providing value for customers by not accepting unreasonable cost increases that would hurt Canadians." The email contained an attached list of alternative coffee products the grocer offers as stores prepare to update their shelves. The move comes as coffee prices continue to rise in Canada. Last month, Statistics Canada reported the price of coffee and tea was up 13.4 per cent in April on a year-over-year basis — outpacing both the 3.8 per cent increase in the cost of groceries that month, as well as Canada's overall inflation rate of 1.7 per cent. Experts say higher coffee prices are in part due to recent extreme weather and changes in temperature, which have caused some producers to experience lower yields. Other pressures include a weak Canadian dollar, making it more expensive to import coffee to Canada from other countries, along with the fact coffee is one of the products still subject to Canada's retaliatory tariffs against the U.S. While the U.S. isn't a major producer of coffee, Canadian distributors often purchase it from American brokers. Folgers products are made by the Orrville, Ohio-based J.M. Smucker Co., which raised prices of its coffee offerings both last June and October in response to higher costs it is facing. President and CEO Mark Smucker told analysts on the company's quarterly earnings call in February that more coffee price increases were likely on the way. He said pricing decisions are dictated by costs it faces. "Although we haven't laid out when other pricing is going to happen, we do expect it's going to happen in the next fiscal year, probably in the first half," Smucker said at the time. In a statement, the company said it has been experiencing "record high and sustained" prices of unroasted coffee beans. "Our pricing actions have been managed prudently and responsibly and have only been taken when justified by costs," said Smucker's spokesman Frank Cirillo in an email on Thursday. "We remain dedicated to working with all our retail partners to manage increased input costs while delivering value to our shared consumers." But Loblaw spokeswoman Catherine Thomas said Folgers' proposed cost increases were "unreasonable and unjustified based on underlying costs" and that the grocer felt it was important to push back as many Canadians continue to struggle with unaffordability. "Despite several attempts to address this with the manufacturer, we were not successful," Thomas said in a statement. "We will not accept or pass unjustified cost increases on to customers and therefore we have removed Folgers from our shelves ... We recognize this may create some inconvenience for customers and for that we apologize but again, we will do what is right to help address price increases." Thomas added Loblaw expects most of its stores to be out of stock of Folgers products over the next week or two. This report by The Canadian Press was first published June 5, 2025. Companies in this story: (TSX:L) Sammy Hudes, The Canadian Press 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
17 minutes ago
- Yahoo
Pound takes breather after hitting highest point against dollar since 2022
The pound pulled back slightly against the dollar on Friday in European trading hours, dipping almost 0.3% to trade around the $1.354 mark. Sterling's rally has sent it to its highest point against the greenback since 2022, but that's largely due to dollar weakness, analysts say. 'Domestic factors have also been supportive of sterling," said Matthew Ryan, head of market strategy at global financial services firm Ebury. Read more: FTSE 100 LIVE: Stocks mixed as traders weigh up Trump-Musk row and trade war developments 'This week's updated UK PMI figures provide reason for optimism, as the composite index was revised sharply higher to 50.3 in May (from the initial 49.4 estimate), i.e. back above the key level of 50 that separates growth from expansion. 'As we've been stressing for some time, Britain's economy should be well positioned to weather the tariff storm, while at the same time inflation is printing well above the Bank of England's 2% target." The dollar index ( headed 0.2% higher, meanwhile. The index tracks it against a basket of other currencies. The pound was almost flat against the euro following a Thursday interest rate cut by the European Central Bank (ECB). Read more: Average UK house price falls in May after stamp duty changes The bloc cut interest rates by a quarter of a percentage point for the eighth time in a year, as the bank attempts to support the euro economy after the turmoil caused by US president Donald Trump's trade war. The benchmark rate on the deposit facility has been reduced from 2.25% down to 2%, from a high of 4% toward the middle of 2023. Gold prices headed higher as economic uncertainty persists surrounding president Trump's trade tariffs. The yellow metal rose despite a strengthening dollar. Spot gold prices rose 0.4% to $3,364, while gold futures headed 0.3% higher to trade around $3,384. The weakness in the dollar in recent weeks has made it cheaper for buyers holding other currencies to snap up gold — a safe haven in uncertain times. "There is considerable geopolitical uncertainty with Russia-Ukraine, Iran, Syria and China driving people to buy gold... and although traders may not expect gold to rise as quickly, there is still plenty of upside," Daniel Pavilonis, senior market strategist at RJO Futures told Reuters on Thursday. Oil prices were on the back foot on Friday, pulling slightly lower amid concerns about oversupply and economic growth. Brent crude futures (BZ=F) fell 0.3% to $64.59 a barrel, while West Texas Intermediate futures (CL=F) declined 0.3% at $63.18 a barrel. Read more: The most popular stocks and funds investors bought in May Saudi Arabia has bee pushing for a major increase in oil production and has slashed prices for Asian buyers, signalling weaker demand, analysts said. The July price cut by Saudi Arabia, which is the world's biggest oil exporter, comes after the decision from the Organization of the Petroleum Exporting Countries and their allies — known as OPEC+ — to increase output next in to access your portfolio
