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Business Recorder
13-05-2025
- Business
- Business Recorder
Dollar jumps after US, China reach trade deal
NEW YORK: The dollar surged on Monday as the United States and China reached a deal to temporarily cut reciprocal tariffs, easing concerns a trade war between the world's two biggest economies could lead to a global recession. The US will reduce extra tariffs it imposed on Chinese imports in April to 30% from 145% and Chinese duties on US imports will fall to 10% from 125%, effective for 90 days. The de-escalation surpassed investor expectations, with many expecting an introductory round of talks with few, if any, agreements. 'It's 90 days and so this basically buys some more time, I sort of think the US blinked,' said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. 'I'm not a big fan of the tariffs in the first place, but once they were in place, the US seemed to back down without getting much in exchange. That is, we stopped with our reciprocal tariffs on China and so they unwind their reciprocal tariffs on us, but we're still back at square one.' The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 1.2% to 101.58, with the euro down 1.17% at $1.1115 and on track for its biggest one-day decline of the year. The risk-on mood propelled US stocks sharply higher, with the S&P 500 up more than 2%, and weighed on safe-haven currencies, with the dollar up 1.91% against the Japanese yen to 148.12 after reaching 148.59, its highest level since April 3. Against the Swiss franc, the dollar rose 1.4% to 0.843 after reaching 0.8475, its highest since April 10. Sterling weakened 0.8% to $1.3198 and was on track for its biggest daily drop since April 7. While the greenback has strengthened for three straight weeks on growing optimism over potential trade deals, the dollar is still down 2.2% since April 2, when Trump announced sweeping tariffs as his uneven rollout of policies and exemptions shook confidence in US assets. The focus this week will also be on US Consumer Price Index (CPI) figures on Tuesday and on April retail sales due on Thursday for indications of how the global trade conflict has impacted the economy and expectations for further interest rate cuts by the US Federal Reserve. Traders on Monday dialed back on rate cut expectations by the Fed and European Central Bank as economic prospects improved after the Sino-US trade deal. Markets now see the first cut of at least 25 basis points (bps) from the Fed as likely to come at the central bank's September meeting, compared with the July view last week. The Chinese yuan strengthened 0.64% against the greenback to 7.194 per dollar. Meanwhile, geopolitical tensions also appeared to ease over the weekend, further supporting risk sentiment. India and Pakistan announced a ceasefire following four days of fighting between the nuclear powers which had rattled markets. Ukrainian President Volodymyr Zelenskiy said he was ready to meet Russian leader Vladimir Putin in Turkey on Thursday for direct talks. That would be the first negotiations between the two countries since the early months of Russia's 2022 invasion. .
Mint
05-05-2025
- Business
- Mint
Dollar slides against peers weighed down by fresh tariff worries
(This story has been refiled to say 'unwinding,' instead of 'winding,' in paragraph 4) NEW YORK (Reuters) -The U.S. dollar weakened against major currencies, including the yen and the euro, on Monday as markets weighed continued uncertainty from President Donald Trump's tariff policies and their impact on the economy. The greenback slid to a fresh record low against the Taiwan dollar to 28.8150 amid speculation that Taiwan was letting its currency appreciate as part of a trade deal with the U.S., or at least was unwilling to intervene to stop it rising alongside sharp inflows in capital. Other Asian-Pacific currencies, including the Australian dollar, gained against the U.S. dollar. The Aussie reached as high as $0.64935, its highest since December last year. The selloff of the dollar against Asian currencies is partly driven by the unwinding of large, un-hedged positions taken by some investors such as life insurance in Taiwan amid talk of more U.S. tariffs, said Marc Chandler, chief market strategist at Bannockburn Global Forex. "The dollar sold off in Asia partly because some people are worried there'd be semiconductor tariffs by the U.S. to be announced as early as Wednesday and talk that in these bilateral trade talks the U.S. could transfer currency appreciation in East Asia," Chandler said. Trump doubled down on tariff-driven policies during an interview on Sunday, reiterating that the duties on U.S. imports would eventually make Americans rich. He announced on Sunday a new 100% tariff on films made outside the U.S. Treasury Secretary Scott Bessent on Monday defended Trump's tariffs, emphasizing that his broader agenda including tax cuts would eventually lead to long-term economic growth. Markets have been affected by the fact that Trump is not leaving his stance that tariffs are important, said Juan Perez, director of trading at Monex USA in Washington. The dollar was down 0.73% against the Japanese yen at 143.885. Against the Swiss franc, the dollar weakened 0.50% to 0.82255. Trump said he would not attempt to remove Federal Reserve Chair Jerome Powell, but repeated calls for lower interest rates and called Powell a "stiff". The Fed meets on Wednesday and is widely expected to leave rates steady following a solid March payrolls report. Perez said the U.S. dollar was being hurt the most by chaos in the markets. "I think we're returning today very sour mood and descent and this idea that overall you may not necessarily rely on American markets the way you used to. And that's been seen across Treasuries." Markets now imply only a 37% chance of a Fed rate cut in June, down from 64% a month ago. Goldman Sachs and Barclays both shifted their cut calls to July from June. The dollar trimmed its losses briefly against the yen after the Institute for Supply Management report for April showed a larger-than-expected pickup in growth in the U.S. services sector, which accounts for two-thirds of the American economy. Chinese onshore markets were closed but the yuan traded offshore hit its highest in almost six months at 7.1831 per dollar as investors wagered Beijing might let its currency strengthen as part of trade talks with Washington. The yuan was last up 0.12% to 7.2014 per dollar. In Europe, the euro was up 0.15% at $1.131600 and the pound was up 0.21% at $1.32950. The Bank of England will meet on Thursday and is widely expected to cut rates by a further 25 basis points to 4.25%. Central banks in Norway and Sweden also meet this week and are expected to keep rates steady. (Reporting by Chibuike Oguh in New York, Wayne Cole and Alun John. Editing by Sonali Paul, Mark Potter, Tomasz Janowski, Nia Williams and Marguerita Choy) First Published: 6 May 2025, 03:13 AM IST
CNA
05-05-2025
- Business
- CNA
Dollar slides against peers weighed down by fresh tariff worries
NEW YORK :The U.S. dollar weakened against major currencies, including the yen and the euro, on Monday as markets weighed continued uncertainty from President Donald Trump's tariff policies and their impact on the economy. The greenback slid to a fresh record low against the Taiwan dollar to 28.8150 amid speculation that Taiwan was letting its currency appreciate as part of a trade deal with the U.S., or at least was unwilling to intervene to stop it rising alongside sharp inflows in capital. Other Asian-Pacific currencies, including the Australian dollar, gained against the U.S. dollar. The Aussie reached as high as $0.64935, its highest since December last year. The selloff of the dollar against Asian currencies is partly driven by the winding of large, un-hedged positions taken by some investors such as life insurance in Taiwan amid talk of more U.S. tariffs, said Marc Chandler, chief market strategist at Bannockburn Global Forex. "The dollar sold off in Asia partly because some people are worried there'd be semiconductor tariffs by the U.S. to be announced as early as Wednesday and talk that in these bilateral trade talks the U.S. could transfer currency appreciation in East Asia," Chandler said. Trump doubled down on tariff-driven policies during an interview on Sunday, reiterating that the duties on U.S. imports would eventually make Americans rich. He announced on Sunday a new 100 per cent tariff on films made outside the U.S. Treasury Secretary Scott Bessent on Monday defended Trump's tariffs, emphasizing that his broader agenda including tax cuts would eventually lead to long-term economic growth. Markets have been affected by the fact that Trump is not leaving his stance that tariffs are important, said Juan Perez, director of trading at Monex USA in Washington. The dollar was down 0.73 per cent against the Japanese yen at 143.885. Against the Swiss franc, the dollar weakened 0.50 per cent to 0.82255. Trump said he would not attempt to remove Federal Reserve Chair Jerome Powell, but repeated calls for lower interest rates and called Powell a "stiff". The Fed meets on Wednesday and is widely expected to leave rates steady following a solid March payrolls report. Perez said the U.S. dollar was being hurt the most by chaos in the markets. "I think we're returning today very sour mood and descent and this idea that overall you may not necessarily rely on American markets the way you used to. And that's been seen across Treasuries." Markets now imply only a 37 per cent chance of a Fed rate cut in June, down from 64 per cent a month ago. Goldman Sachs and Barclays both shifted their cut calls to July from June. The dollar trimmed its losses briefly against the yen after the Institute for Supply Management report for April showed a larger-than-expected pickup in growth in the U.S. services sector, which accounts for two-thirds of the American economy. Chinese onshore markets were closed but the yuan traded offshore hit its highest in almost six months at 7.1831 per dollar as investors wagered Beijing might let its currency strengthen as part of trade talks with Washington. The yuan was last up 0.12 per cent to 7.2014 per dollar. In Europe, the euro was up 0.15 per cent at $1.131600 and the pound was up 0.21 per cent at $1.32950. The Bank of England will meet on Thursday and is widely expected to cut rates by a further 25 basis points to 4.25 per cent. Central banks in Norway and Sweden also meet this week and are expected to keep rates steady.
CNBC
29-04-2025
- Business
- CNBC
Dollar slips against other major currencies ahead of U.S. data
The U.S. dollar traded mixed overall on Monday, with the dollar index down 0.4%. This week's economic reports may give a first glimpse of whether U.S. President Donald Trump's trade war is hitting home. "This is the calm before the storm. We're consolidating, trading broadly sideways today mostly within Friday's ranges," said Marc Chandler, chief market strategist, at Bannockburn Global Forex in New York. "The big stuff still lies ahead this week. We have largely seen soft survey data, but this week we will see evidence that weakness has crept into the real sector data such as Q1 GDP (gross domestic product) and that's before the tariffs." The euro gained 0.4% against the dollar to $1.1411. The greenback was down 1% versus the yen at 142.24 yen, headed for its largest monthly fall in nearly 2-1/2 years as Trump has rattled confidence in the dependability of U.S. assets. Both sides seemed to soften their respective stances, with the Trump administration signaling openness to reducing tariffs and China exempting some imports from its 125% levies. Yet where Trump insists there has been progress, and that he has spoken with President Xi Jinping, Beijing has denied trade talks are occurring and on Sunday, Treasury Secretary Scott Bessent did not say that tariff talks were under way. On Monday, Bessent said top U.S. trading partners had made "very good" proposals to avert U.S. tariffs, and one of the first deals to be signed would likely be with India. As for China, the top Treasury official said "all aspects of government are in contact with China," and underscored that it was up to China to reduce tensions since it sold five times more goods to the United States than vice versa. Investors are also awaiting the April U.S. jobs report, due on Friday, where jobs growth is still expected, although at a sharply slower pace than a month earlier. Federal Reserve officials including Chair Jerome Powell have indicated they would be willing to cut interest rates if it becomes clear there are risks to growth. But most appear content to first determine what impact Trump's tariffs have on real-economy metrics such as inflation and employment before making a move. "So unless the hard data — particularly jobs and consumption — clearly rolls over, the Fed is unlikely to act before July. They need real deterioration to justify a move, not just forecasts or soft indicators," Saxo Bank chief investment strategist Charu Chanana said. The U.S. also releases first-quarter GDP data and the Federal Reserve's favored inflation gauge, core PCE, this week, while GDP and preliminary inflation figures are also due in Europe. Across the Atlantic, the euro fell 0.4% against the pound to 84.97 pence, as news hit of a massive power outage across much of Spain on Monday. Canadians, meanwhile, vote in a general election on Monday, with the ruling Liberal Party holding a narrow lead in opinion polls and a larger one in online prediction markets. Options markets suggest traders are not bracing for much volatility in currency trade and the Canadian dollar was flat at C$1.3854 per U.S. dollar. The Bank of Japan, on the other hand, sets monetary policy on Thursday. No policy change is expected, though markets will be focused on the outlook and how policymakers are planning to navigate an uncertain economic environment- especially as U.S.-Japan trade talks are expected to touch on the currency. Japan's top currency diplomat Atsushi Mimura on Monday denied a report in the Yomiuri newspaper that Bessent had said during a bilateral meeting with Japan that a weak dollar and a strong yen are desirable.
Business Recorder
28-04-2025
- Business
- Business Recorder
Dollar mixed against major currencies
NEW YORK: The US dollar traded mixed overall on Monday, falling against the yen and sterling, but posting gains versus the Swiss franc, as investors waited warily for further news of US trade policy and braced for a week packed with economic data. This week's economic reports may give a first glimpse of whether US President Donald Trump's trade war is hitting home. 'This is the calm before the storm. We're consolidating, trading broadly sideways today mostly within Friday's ranges,' said Marc Chandler, chief market strategist, at Bannockburn Global Forex in New York. 'The big stuff still lies ahead this week. We have largely seen soft survey data, but this week we will see evidence that weakness has crept into the real sector data such as Q1 GDP (gross domestic product) and that's before the tariffs.' For now, the dollar has found its footing, trading little changed against the euro at $1.1365 and rising 0.2% versus the Swiss franc to 0.8280 franc. It was down 0.5% versus the yen at 142.99 yen, headed for its largest monthly fall in nearly 2-1/2 years as Trump has rattled confidence in the dependability of US assets. The euro, on the other hand, was on track for its largest monthly gain against the dollar since November 2022. The greenback did trim monthly losses against both the euro and yen toward the end of last week amid an apparent conciliatory shift in the tone of US-China relations. Both sides seemed to soften their respective stances, with the Trump administration signalling openness to reducing tariffs and China exempting some imports from its 125% levies. Yet where Trump insists there has been progress, and that he has spoken with President Xi Jinping, Beijing has denied trade talks are occurring and on Sunday, Treasury Secretary Scott Bessent did not say that tariff talks were under way. On Monday, Bessent said top US trading partners had made 'very good' proposals to avert US tariffs, and one of the first deals to be signed would likely be with India. As for China, the top Treasury official said 'all aspects of government are in contact with China,' and underscored that it was up to China to reduce tensions since it sold five times more goods to the United States than vice versa. Investors are also awaiting the April US jobs report, due on Friday, where jobs growth is still expected, although at a sharply slower pace than a month earlier. Federal Reserve officials including Chair Jerome Powell have indicated they would be willing to cut interest rates if it becomes clear there are risks to growth. But most appear content to first determine what impact Trump's tariffs have on real-economy metrics such as inflation and employment before making a move. 'So unless the hard data — particularly jobs and consumption — clearly rolls over, the Fed is unlikely to act before July. They need real deterioration to justify a move, not just forecasts or soft indicators,' Saxo Bank chief investment strategist Charu Chanana said. The US also releases first-quarter GDP data and the Federal Reserve's favored inflation gauge, core PCE, this week, while GDP and preliminary inflation figures are also due in Europe. Across the Atlantic, the euro fell 0.4% against the pound to 84.97 pence, as news hit of a massive power outage across much of Spain on Monday. Canadians, meanwhile, vote in a general election on Monday, with the ruling Liberal Party holding a narrow lead in opinion polls and a larger one in online prediction markets. Options markets suggest traders are not bracing for much volatility in currency trade and the Canadian dollar was flat at C$1.3854 per US dollar. The Bank of Japan, on the other hand, sets monetary policy on Thursday. No policy change is expected, though markets will be focused on the outlook and how policymakers are planning to navigate an uncertain economic environment- especially as US-Japan trade talks are expected to touch on the currency.
