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Yahoo
5 days ago
- Business
- Yahoo
Dollar's Weekly Gain Looks Like a Blip as Pressures Mount
(Bloomberg) -- The best week for the dollar in three months isn't enough to reverse its broader declines as US trade and policy uncertainty weighs on sentiment. NYC Congestion Toll Brings In $216 Million in First Four Months Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The Economic Benefits of Paying Workers to Move Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry NY Wins Order Against US Funding Freeze in Congestion Fight A gauge of dollar strength is on track for its longest monthly losing streak in five years despite being up 0.4% so far this week. Investors were focused on a proposed US measure that would hit companies from countries deemed to have 'discriminatory' tax policies. 'If the bill as presently written takes effect, it would deter foreign investment in US assets at a time when the country faces increasing reliance on foreign capital to finance its ballooning debt,' wrote Elias Haddad, a strategist at Brown Brothers Harriman & Co. in a note. 'Clearly, this is not good for the dollar.' Concern that President Donald Trump's erratic trade policies will undermine the economy are adding to the greenback's weakness and eroding its appeal as a traditional haven bet. A court battle is underway over the legality of Trump's sweeping tariffs — though the US administration insists they're here to stay. The Bloomberg Dollar Spot Index pared earlier gains to trade up 0.1% on Friday as reports showed US consumers hitting the brakes on spending in April while goods imports plummeted by a record as companies adjusted to higher tariffs. US consumer sentiment rebounded in late May, according to the University of Michigan. The latest data is 'still insufficient for the Federal Reserve to seriously consider its cuts,' said Yusuke Miyairi, a foreign-exchange strategist at Nomura. 'Choppy price action in the dollar continues, owing to the market following back-and-forth tariff headlines.' On Friday, Trump accused China of violating an agreement with the US to ease tariffs, intensifying tensions between the world's two largest economies again. Earlier in the week, stronger-than-expected economic data lifted the dollar amid a global bond rally. But on Thursday, the greenback weakened after weak jobs results. Meanwhile, a gauge of emerging-market currencies is on track for its first weekly loss since mid-April as investors scale back on risk following recent gains. The South African rand slumped more than 1% against the dollar on Friday. While currencies including the rand and Mexico's peso have strengthened more than 4% against the greenback since Trump unveiled his comprehensive list of tariffs, traders are taking some profits amid renewed global trade noise. Investors 'are bringing back some USD bids' ahead of the weekend, said Alejandro Cuadrado, head of global FX and Latin America strategy at Banco Bilbao Vizcaya Argentaria SA in New York. 'As we approach new tariff deadlines we could see some uptick in volatility from very low levels, particularly in Latin America.' The world's reserve currency has been losing its appeal since the beginning of the year amid the trade war. Speculative traders remained bearish on the dollar in the week through May 20, but trimmed their positioning to $12.4 billion from $16.5 billion in the week prior, according to the Commodity Futures Trading Commission. 'What we're waiting to see next is whether the dollar decline begins to reassert itself,' said Paul Mackel, global head of currency research at HSBC Holdings Plc. 'So what can drive that? Front and center it will be related to what's happening with the US economy.' --With assistance from Naomi Tajitsu and Vinícius Andrade. (Updates with US economic data, market moves throughout and adds performance of emerging-market currencies.) YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce How Coach Handbags Became a Gen Z Status Symbol Will Small Business Owners Knock Down Trump's Mighty Tariffs? ©2025 Bloomberg L.P.
Business of Fashion
11-05-2025
- Business
- Business of Fashion
US, China Cite ‘Substantial Progress' in Geneva Trade Talks
The US and China both reported 'substantial progress' after two days of talks in Switzerland aimed at de-escalating a trade war, marking what Chinese Vice Premier He Lifeng called 'an important first step' toward resolving differences. While neither side immediately announced specific measures on Sunday, He said the world's two biggest economies agreed to create a mechanism for further talks, led by US Treasury Secretary Scott Bessent and himself. Bessent said the US would share details on Monday and He promised a joint statement. 'As we say back in China, if the dishes are delicious, the timing doesn't matter,' Chinese Vice Commerce Minister Li Chenggang told reporters in Geneva. 'Whenever it gets released, it will be good news for the world.' Negotiators sought to convey a positive tone in separate comments to reporters, with He complimenting the US side's professionalism and US Trade Representative Jamieson Greer suggesting that trade clashes between the two sides may be overrated. 'It's important to understand how quickly we were able to come to an agreement, which reflects that perhaps the differences were not as large as maybe thought,' Greer said. 'That being said, there was a lot of groundwork that went into these two days.' As the trading week got underway in Asia, the dollar climbed against most major currencies including the euro, yen and Swiss franc. The Australian dollar, seen as a proxy for sentiment toward China, edged higher along with the offshore Chinese yuan. 'While we remain skeptical that anything of substance could be agreed upon after only two days of talks, it's clear that both sides are looking to de-escalate the situation,' Win Thin, global head of markets strategy at Brown Brothers Harriman & Co., wrote in a note. The announcements followed hours of meetings between Bessent, Greer and He, hosted by the Swiss ambassador to the United Nations, who residence served as the venue. Bessent and He both said the two sides made 'substantial progress.' Tensions between the world's two biggest economies reached a new high point after President Donald Trump steadily increased tariffs on Beijing to 145%. The duties are supposed to address China's role in the fentanyl trade, its massive trade surplus with the US, and respond to Beijing's retaliatory measures imposed after Trump's opening salvo. China in response increased its tariffs on US goods to 125%. The tariff tit-for-tat led to a standoff with neither side wanting to budge and no off-ramp in sight. Eventually, both sides acknowledged a reduction in tensions and tariffs is necessary and public talks were announced. Fears of empty shelves may have contributed to the urgency for the meetings. Trump and his economic team have gotten pleas from retail executives who explained in meetings with senior officials that the result of sustained high tariffs would be pandemic-level shortages and supply-chain shocks. Chinese President Xi Jinping, for his part, sought to fortify his nation's economy ahead of the talks, but data show signs of weakness. The US team went into the first day of talks somewhat hemmed in by their boss. Trump posted on Truth Social before the meetings even started: '80% Tariff on China seems right!' He added that it was 'up to' his Treasury chief, without elaborating. After the first day of meetings concluded, Trump chimed in, again on Truth Social, to hail 'great progress' and said 'much' was agreed to, while negotiators stayed mum and continued to hammer out details late into the night. 'A total reset negotiated in a friendly, but constructive, manner,' Trump said Saturday. 'We want to see, for the good of both China and the U.S., an opening up of China to American business.' Trump told reporters Friday he might speak to his Chinese counterpart after the Switzerland meetings, depending on what Bessent advised him. The US and China already have a trade deal on the books, which was signed at the end of Trump's first term in January 2020. At the time, the president called it 'historic' and said it was 'righting the wrongs of the past.' As part of that agreement, Beijing committed to purchase more than $200 billion in additional US goods and services and open up its market to America's agriculture and financial services sectors. Trump repeatedly faulted the Biden administration for not enforcing the deal after China failed to live up to its promises. By Jenny Leonard and Hugo Miller Learn more: Resale Welcomes a Wave of 'Tariff-ied' New Customers With tariffs driving up costs of new clothing, resale platforms are seeing a surge of new shoppers. But absorbing them all comes with challenges.
