Latest news with #AnkurBanerjee
Yahoo
16 hours ago
- Business
- Yahoo
Dollar frail on weak economic data, trade uncertainty lingers
By Ankur Banerjee SINGAPORE (Reuters) -The dollar softened on Thursday, stuck near six-week lows after weak U.S. economic data revived fears of slow growth and high inflation, while the euro was steady ahead of an expected interest rate cut from the European Central Bank. The soft data, which showed U.S. services sector contracted for the first time in nearly a year in May and an easing labour market, led to a rally in Treasuries, with the yield on the U.S. 10-year Treasury note hovering at four-week lows. The dollar was a tad lower against the yen at 142.80, while the euro stood at $1.1424, not far from the six-week high it touched at the start of the week. Sterling last fetched $1.3557. Markets have been rattled since U.S. President Donald Trump announced a slate of tariffs on countries around the globe on April 2, only to pause some and declare new ones, leading investors to look for alternatives to U.S. assets. The dollar weakness has been the story of the year, with foreign exchange strategists surveyed by Reuters expecting further declines on mounting concerns about the U.S. federal deficit and debt. The dollar index, which measures the U.S. currency against six others, was at 98.749 and has dropped about 9% this year, poised for its weakest yearly performance since 2017. Investors are now awaiting Friday's monthly payrolls figures to gauge the state of the labour market after payroll processing firm ADP reported that U.S. private payrolls increased far less than expected in May. The more comprehensive employment report on Friday is expected to show that non-farm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, according to a Reuters survey of economists. The unemployment rate is forecast to hold steady at 4.2%. "May's payrolls data tomorrow will be important to see if investor concerns are valid or overdone. A soft labour market report is likely to result in outsize falls in the U.S. dollar," said Mansoor Mohi-uddin, chief economist at Bank of Singapore. Trump on Wednesday redoubled his calls for Federal Reserve Chair Jerome Powell to lower interest rates after the ADP data was released. Markets have priced in 56 basis points of rate cuts this year from the Fed, with traders pricing in a 95% chance for easing in September, LSEG data showed. In other currencies, the Australian dollar was 0.22% higher at $0.6507, while the New Zealand dollar rose 0.24% to $0.60425. TRADE DEALS Investors remain worried about U.S. trade negotiations and the lack of progress in hashing out deals ahead of the early July deadline. Trump called China's Xi Jinping tough and "extremely hard to make a deal with" on Wednesday, exposing frictions after the White House raised expectations for a long-awaited phone call between the two leaders this week. Attention will also be on Europe, where the central bank is widely expected to cut rates by 25 basis points later on Thursday. Investors will look for clues for what comes after that even as the case grows for a pause in its year-long easing cycle. The ECB has cut rates seven times in 13 months as inflation eased from post-pandemic highs, seeking to prop up a euro zone economy that was struggling even before Trump's erratic economic and trade policy dealt it yet another blow. "Lower energy prices, forthcoming fiscal stimulus, and reduced global recession risks warrant a wait-and-see approach to further policy moves," said Laura Cooper, head of macro credit and investment strategist at Nuveen. "While a potential insurance cut could come in September, it will be contingent on incoming data – yet risks appear skewed to the upside amid depressed trade-led expectations." Sign in to access your portfolio
Yahoo
17 hours ago
- Business
- Yahoo
Dollar frail on weak economic data, trade uncertainty lingers
By Ankur Banerjee SINGAPORE (Reuters) -The dollar softened on Thursday, stuck near six-week lows after weak U.S. economic data revived fears of slow growth and high inflation, while the euro was steady ahead of an expected interest rate cut from the European Central Bank. The soft data, which showed U.S. services sector contracted for the first time in nearly a year in May and an easing labour market, led to a rally in Treasuries, with the yield on the U.S. 10-year Treasury note hovering at four-week lows. The dollar was a tad lower against the yen at 142.80, while the euro stood at $1.1424, not far from the six-week high it touched at the start of the week. Sterling last fetched $1.3557. Markets have been rattled since U.S. President Donald Trump announced a slate of tariffs on countries around the globe on April 2, only to pause some and declare new ones, leading investors to look for alternatives to U.S. assets. The dollar weakness has been the story of the year, with foreign exchange strategists surveyed by Reuters expecting further declines on mounting concerns about the U.S. federal deficit and debt. The dollar index, which measures the U.S. currency against six others, was at 98.749 and has dropped about 9% this year, poised for its weakest yearly performance since 2017. Investors are now awaiting Friday's monthly payrolls figures to gauge the state of the labour market after payroll processing firm ADP reported that U.S. private payrolls increased far less than expected in May. The more comprehensive employment report on Friday is expected to show that non-farm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, according to a Reuters survey of economists. The unemployment rate is forecast to hold steady at 4.2%. "May's payrolls data tomorrow will be important to see if investor concerns are valid or overdone. A soft labour market report is likely to result in outsize falls in the U.S. dollar," said Mansoor Mohi-uddin, chief economist at Bank of Singapore. Trump on Wednesday redoubled his calls for Federal Reserve Chair Jerome Powell to lower interest rates after the ADP data was released. Markets have priced in 56 basis points of rate cuts this year from the Fed, with traders pricing in a 95% chance for easing in September, LSEG data showed. In other currencies, the Australian dollar was 0.22% higher at $0.6507, while the New Zealand dollar rose 0.24% to $0.60425. TRADE DEALS Investors remain worried about U.S. trade negotiations and the lack of progress in hashing out deals ahead of the early July deadline. Trump called China's Xi Jinping tough and "extremely hard to make a deal with" on Wednesday, exposing frictions after the White House raised expectations for a long-awaited phone call between the two leaders this week. Attention will also be on Europe, where the central bank is widely expected to cut rates by 25 basis points later on Thursday. Investors will look for clues for what comes after that even as the case grows for a pause in its year-long easing cycle. The ECB has cut rates seven times in 13 months as inflation eased from post-pandemic highs, seeking to prop up a euro zone economy that was struggling even before Trump's erratic economic and trade policy dealt it yet another blow. "Lower energy prices, forthcoming fiscal stimulus, and reduced global recession risks warrant a wait-and-see approach to further policy moves," said Laura Cooper, head of macro credit and investment strategist at Nuveen. "While a potential insurance cut could come in September, it will be contingent on incoming data – yet risks appear skewed to the upside amid depressed trade-led expectations." Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Daily Maverick
2 days ago
- Business
- Daily Maverick
Asian stocks up, dollar soft as trade uncertainty mounts
South Korea stocks hit 10-month high after election Trade uncertainty weighs as deadline for US offers loom Investors pin hopes on Xi-Trump call this week By Ankur Banerjee SINGAPORE, June 4 (Reuters) – Asian stocks inched higher on Wednesday and the dollar wobbled near six-week lows as traders braced for higher US duties on steel and aluminium, the latest chapter in the trade war saga that has rattled the markets for much of the year. South Korea's stocks and its currency surged as liberal presidential candidate Lee Jae-myung's election victory raised hopes of swift economic stimulus, market reforms and easing policy uncertainty. The benchmark jumped more than 2% to its highest since August 2024. That left the MSCI's broadest index of Asia-Pacific shares outside Japan 0.6% higher. Japan's rose 0.8%, while Taiwan stocks jumped 1.6% after artificial intelligence behemoth Nvidia boosted US stocks overnight. Data on Wednesday showed US job openings increased in April, but layoffs picked up, indicating a slowing labour market as tariffs impact the economic outlook. Investor attention has been on a possible call between US President Donald Trump and Chinese leader Xi Jinping sometime this week as tensions between the world's top two economies simmer. Trump on Friday accused China of violating a Geneva agreement to roll back tariffs and trade restrictions. Beijing said it would safeguard its interests and that the accusation was groundless. Chinese stocks were little changed in early trading with the blue chip index up 0.09%. Hong Kong's Hang Seng index rose 0.27%. 'Markets may be desensitized to trade headlines, but Trump-Xi talks remain in focus. A grand deal looks unlikely, yet any escalation could still spark a bout of risk aversion,' said Charu Chanana, chief investment strategist at Saxo in Singapore. Also in focus has been the pace of trade negotiations and the lack of significant progress. Wednesday is the deadline for US trading partners to submit their proposals for deals that might help them avoid Trump's hefty 'Liberation Day' tariffs from taking effect in five weeks. Trump signed an executive proclamation that puts into effect from 0401 GMT on Wednesday his surprise announcement last week that he was taking the tariffs on steel and aluminium imports that had been in place since March to 50% from 25%. 'We believe that the steel & aluminium tariffs are an exemplar of other strategic tariffs that are coming and likely to 'stick',' said Thierry Wizman, global FX & rates strategist at Macquarie. 'With that, there's still little impetus for a US dollar rally to take hold.' DOLLAR WEAKNESS The on-again-off-again tariffs from Trump have led to investors fleeing US assets looking for safe havens, including gold and other currencies, this year as they expect trade uncertainties to take a toll on the global economy. The Organisation for Economic Cooperation and Development said the global economy is on course to slow from 3.3% last year to 2.9% in 2025 and 2026, trimming its estimates from March, mainly on the fallout from the Trump administration's trade war. The dollar on Wednesday was on the back foot, slipping 0.17% against the yen at 143.72 and 0.1% against the Swiss franc at 0.8227. The euro rose 0.15% to $1.1388. The dollar index, which measures the US unit versus six other major currencies, was at 99.11, not far from the six-week low of 98.58 touched on Monday. The index is down 8.5% this year. In commodities, oil prices eased, weighed down by a loosening supply-demand balance following increasing OPEC+ output and lingering concerns over the global economic outlook due to tariff tensions. Brent crude futures dipped 0.06% to $65.59 a barrel while US West Texas Intermediate crude was at $63.35 per barrel, down 0.09%. Gold rose 0.5% to $3,369.59 per ounce, taking its gains for the year to an eye-popping 28% on safe-haven flows.
Yahoo
2 days ago
- Business
- Yahoo
Morning Bid: No 'best offers' yet as tariff deadline looms
A look at the day ahead in European and global markets from Ankur Banerjee Today is the deadline for U.S. trading partners to submit their "best offer" to avoid punishing import tax rates, the same day that U.S. duties on imported steel and aluminium kick in, and investors are more jittery than usual. So far, only Britain has struck a preliminary trade agreement with the U.S. during Trump's 90-day pause on a wider array of tariffs. That pause is set to expire in about five weeks and investors have been worried about the lack of progress in hashing out deals. Adding to the angst, Japanese Chief Cabinet Secretary Yoshimasa Hayashi said Tokyo has not received a letter from Washington asking for its best proposals on trade talks. The on-again-off-again tariff pronouncements from Trump this year have investors fleeing U.S. assets and looking for safe havens and alternatives, including gold. They expect trade uncertainties will take a heavy toll on the global economy. The main question in financial markets has been where the money that usually flowed into U.S. assets will end up going. For years, money managers embraced the fatalistic presumption that "there-is-no-alternative" (TINA ... yes, markets love acronyms) but perhaps there are options now. As Manishi Raychaudhuri, the founder and CEO of Emmer Capital Partners Ltd, puts it: While Europe may be the obvious destination, relative value metrics may favour emerging Asia. The data so far does not give a complete picture. But what it does show is investors are lowering their exposure to U.S. assets, and only time will tell where they end up. Asian markets rose on Wednesday, boosted by tech stocks as traders hope a deal could still be possible if and when U.S. President Donald Trump and Chinese leader Xi Jinping talk this week. The spotlight in Asia was also on South Korean assets. Seoul's benchmark share index surged to 10-month top and the currency firmed as liberal presidential candidate Lee Jae-myung's election victory raised expectations for swift economic stimulus and market reforms. European futures point to a slightly higher open ahead of a series of manufacturing data from the region and as the European Central Bank starts its policy meeting. The ECB is all but certain to cut rates on Thursday and stay on its easing cycle as muted wage growth, a strong euro and lukewarm economic growth all point to easing inflation. Data on Tuesday showed euro zone inflation in May eased below the ECB target of 2%. Key developments that could influence markets on Wednesday: Economic events: May PMI data for UK, euro zone, Germany and France Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here. (By Ankur Banerjee in Singapore; Editing by Edmund Klamann)
Yahoo
2 days ago
- Business
- Yahoo
Asian stocks up, dollar soft as trade uncertainty mounts
By Ankur Banerjee SINGAPORE (Reuters) - Asian stocks inched higher on Wednesday and the dollar wobbled near six-week lows as traders braced for higher U.S. duties on steel and aluminium, the latest chapter in the trade war saga that has rattled the markets for much of the year. South Korea's stocks and its currency surged as liberal presidential candidate Lee Jae-myung's election victory raised hopes of swift economic stimulus, market reforms and easing policy uncertainty. The benchmark KOSPI jumped more than 2% to its highest since August 2024. That left the MSCI's broadest index of Asia-Pacific shares outside Japan 0.6% higher. Japan's Nikkei rose 0.8%, while Taiwan stocks jumped 1.6% after artificial intelligence behemoth Nvidia boosted U.S. stocks overnight. [.N] Data on Wednesday showed U.S. job openings increased in April, but layoffs picked up, indicating a slowing labour market as tariffs impact the economic outlook. Investor attention has been on a possible call between U.S. President Donald Trump and Chinese leader Xi Jinping sometime this week as tensions between the world's top two economies simmer. Trump on Friday accused China of violating a Geneva agreement to roll back tariffs and trade restrictions. Beijing said it would safeguard its interests and that the accusation was groundless. Chinese stocks were little changed in early trading with the blue chip index up 0.09%. Hong Kong's Hang Seng index rose 0.27%. "Markets may be desensitized to trade headlines, but Trump-Xi talks remain in focus. A grand deal looks unlikely, yet any escalation could still spark a bout of risk aversion," said Charu Chanana, chief investment strategist at Saxo in Singapore. Also in focus has been the pace of trade negotiations and the lack of significant progress. Wednesday is the deadline for U.S. trading partners to submit their proposals for deals that might help them avoid Trump's hefty "Liberation Day" tariffs from taking effect in five weeks. Trump signed an executive proclamation that puts into effect from 0401 GMT on Wednesday his surprise announcement last week that he was taking the tariffs on steel and aluminium imports that had been in place since March to 50% from 25%. "We believe that the steel & aluminium tariffs are an exemplar of other strategic tariffs that are coming and likely to 'stick'," said Thierry Wizman, global FX & rates strategist at Macquarie. "With that, there's still little impetus for a U.S. dollar rally to take hold." DOLLAR WEAKNESS The on-again-off-again tariffs from Trump have led to investors fleeing U.S. assets looking for safe havens, including gold and other currencies, this year as they expect trade uncertainties to take a toll on the global economy. The Organisation for Economic Cooperation and Development said the global economy is on course to slow from 3.3% last year to 2.9% in 2025 and 2026, trimming its estimates from March, mainly on the fallout from the Trump administration's trade war. The dollar on Wednesday was on the back foot, slipping 0.17% against the yen at 143.72 and 0.1% against the Swiss franc at 0.8227. The euro rose 0.15% to $1.1388. The dollar index, which measures the U.S. unit versus six other major currencies, was at 99.11, not far from the six-week low of 98.58 touched on Monday. The index is down 8.5% this year. In commodities, oil prices eased, weighed down by a loosening supply-demand balance following increasing OPEC+ output and lingering concerns over the global economic outlook due to tariff tensions. [O/R] Brent crude futures dipped 0.06% to $65.59 a barrel while U.S. West Texas Intermediate crude was at $63.35 per barrel, down 0.09%. Gold rose 0.5% to $3,369.59 per ounce, taking its gains for the year to an eye-popping 28% on safe-haven flows. [GOL/]
