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Yahoo
22-05-2025
- Business
- Yahoo
The dollar could lose its crown as an 'unfortunate truth' forces investors to rethink US assets
The US dollar is under pressure as global investors grow increasingly wary of America's fiscal trajectory. Once seen as a reliable safe haven, the greenback is now facing renewed skepticism, with strategists telling Yahoo Finance that capital is shifting toward undervalued currencies in Europe and Asia amid expectations of foreign stimulus and more attractive valuations abroad. The US Dollar Index ( — which tracks the dollar's value against a basket of major currencies including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc — has dropped more than 8% since the start of the year, underperforming every other G10 currency, according to Bloomberg data. It ranks as one of the worst-performing asset classes of the year, alongside Brent Crude (BZ=F). Since April, the index has dipped below the crucial technical and psychological level of 100, hitting lows not seen since 2022. "Investors now have a very strong reason to hedge their long US asset exposure, and the dollar is no longer behaving like a safe haven," Jayati Bharadwaj, FX and macro strategist at TD Securities, told Yahoo Finance on Wednesday. "I would say it's actually following much more of an emerging market playbook, which is the unfortunate truth that we need to come to terms with." Bharadwaj cited mounting US debt and policy uncertainty as key catalysts behind the dollar's decline. Last week's credit rating downgrade by Moody's only deepened market concerns. Adding to the fiscal anxiety, the House of Representatives on Thursday approved President Trump's sweeping tax reform package, otherwise known as the president's "big, beautiful bill." The proposal includes significant cuts to both individual and corporate tax rates and is projected to increase the national debt by $4 trillion over the next decade. The legislation now moves to the Senate for consideration. "The volatility associated with the current administration's policies is a big confidence shock, which is actually forcing other countries to step up their local fiscal policies and work on fostering stronger trade relationships amongst themselves," Bharadwaj said, noting that it ultimately reduces foreign nations' dependence on the US. As a result, Bharadwaj expects the dollar to keep weakening gradually, with another 5% drop likely by year-end. A weaker dollar adds to inflation by driving up import costs, an issue compounded by tariffs that remain near their highest levels since World War II. "The dollar going down is going to add to inflation pressure and reduce purchasing power," Kevin Gordon, senior investment strategist at Charles Schwab, told Yahoo Finance. Gordon highlighted that during the 2021 to 2023 inflation surge, the dollar's strength acted as a partial hedge against rising prices. But with the greenback now weakening and inflation still elevated, that protective buffer is fading. On top of that, tariffs have added further pressure by reducing capital inflows, or the money coming into the US from foreign investors seeking American assets. The shift comes at a challenging time for US policymakers, with President Trump's "Liberation Day" tariff announcement fueling concerns of a broader "sell America" trade, in which US stocks fall, the dollar weakens, and Treasury yields rise. While some of those worries eased after a partial tariff rollback, Deutsche Bank said foreign investors remain wary of America's fiscal trajectory. Read more: How to protect your money during turmoil, stock market volatility To be sure, despite recent weakness, strategists say the US dollar remains dominant in global finance, accounting for about 80% of trade finance and nearly half of global bond issuance. Charles Schwab's Gordon described current softness as a "positioning adjustment" driven by sentiment and portfolio shifts rather than fundamental changes, especially after the dollar's strong bull run since 2011. "The scale is still very much in favor of the dollar, disproportionately so," he said. TD's Bharadwaj echoed this view, calling the recent moves a "healthy recalibration." "For the longest time, most markets became a pure US move and a pure dollar bet," she said. "Now you can actually start to focus on local, idiosyncratic stories." While she doesn't expect the US to lose its "crown" currency status, she noted that "other princes and princesses" may start to take the stage. Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at 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
13-05-2025
- Business
- Yahoo
Gold prices rise as investors 'value-buying' after US-China tariff truce
Gold prices recovered some ground on Tuesday morning, after having fallen following news of a tariff truce between the US and China, reducing the precious metal's appeal as a safe-haven asset. Gold futures (GC=F) jumped 1% to $3,261.40 per ounce on Tuesday morning, while the spot gold price climbed 0.6% to $3,255.44 per ounce at the time of writing. Prices for the precious metal slumped on Monday, after it was announced that the US and China had agreed to temporarily cut tariffs on each other's imports, marking a de-escalation in recent trade tensions. US Treasury secretary Scott Bessent told reporters that the two countries had agreed to lower their tariffs by 115% for 90 days, following negotiations in Switzerland over the weekend. Read more: FTSE 100 LIVE: Stocks cautiously higher as UK job market weakens Investors had been flocking to gold amid concerns over US president Donald Trump's tariff agenda, as it is considered to act a stable store of value, acting as a hedge in times of economic and political uncertainty. An easing of trade tensions on Monday, therefore, dented the precious metal's appeal, as investors pivoted back to stock markets. According to a Reuters report, KCM Trade chief market analyst Tim Waterer said there had been "some value-buying happening on gold at current levels which is helping to prop up the price, despite the generally better outlook for global growth with the US and China on better terms". "The consolidation move in the dollar has allowed the gold price to make a mild push higher," he said. The pound rose against the dollar (GBPUSD=X) on Tuesday, up 0.3% to $1.3208, supported by weakness in the greenback. The US dollar index, ( which measures the greenback against a basket of six currencies, dipped 0.3% to 101.53 at the time of writing, as optimism over the US-China tariff deal appeared to wane slightly. Meanwhile, data released by the Office for National Statistics (ONS) on Tuesday, showed that UK pay growth slowed in the three months to March. The rate of unemployment also inched higher in that period, while the number of job vacancies fell in the three months to April and early estimates showed that the number of payrolled employees fell last month. This all signalled that the UK jobs market had started to cool. Neil Wilson, UK investor strategist at Saxo Bank, said that "UK employment data shows cracks emerging, which supports a more dovish bias from the Bank of England (BoE)". Read more: UK pay growth slows as job market cools amid uncertainty He added that the "BoE should not be hanging about and get in there with cuts, the inflation is not the problem now". Meanwhile, data from the British Retail Consortium, also published on Tuesday, showed a 7% increase year-on-year in UK retail sales. That was up from a 4% decline recorded in April 2024 and was above average three-month growth of 2.9% and a 12-month average of 1.4%. Derren Nathan, head of equity research at Hargreaves Lansdown, said: "This was boosted both by the favourable timing of Easter and the sunniest April on record. A more meaningful comparison looked at March and April combined. "Here the trend still moved in the right direction but to the much smaller tune of 0.2% which is unlikely to offset the impact of higher wages and employers' National Insurance contributions on profits." In other currency moves, the pound rose against the euro (GBPEUR=X), up 0.2% to trade at €1.1887 at the time of writing. Oil prices were little changed on Tuesday morning, as investors weighed the latest developments around global trade. Brent crude futures (BZ=F) traded at $64.93 a barrel, while West Texas Intermediate futures (CL=F) dipped 0.2% to $61.80 a barrel. Read more: Stocks that are trending today Nathan said: "Tariff optimism hasn't been enough to maintain the upward trajectory of Brent crude oil prices." "The loosening supply environment is keeping a lid on momentum, with OPEC+ signalling increased output in May and June and traders evaluating the prospect of lighter sanctions on Iran and Russia." More broadly, the FTSE 100 (^FTSE) was muted on Tuesday morning, trading at 8,605 points at the time of writing. For more details, check our live coverage here. Read more: Pension funds deal to back £50bn of investment for UK private markets and infrastructure Bank of England interest rate-setters want inflation down before more cuts Why it's important to plan for retirement with your partnerError 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
13-05-2025
- Business
- Yahoo
Gold prices rise as investors 'value-buying' after US-China tariff truce
Gold prices recovered some ground on Tuesday morning, after having fallen following news of a tariff truce between the US and China, reducing the precious metal's appeal as a safe-haven asset. Gold futures (GC=F) jumped 1% to $3,261.40 per ounce on Tuesday morning, while the spot gold price climbed 0.6% to $3,255.44 per ounce at the time of writing. Prices for the precious metal slumped on Monday, after it was announced that the US and China had agreed to temporarily cut tariffs on each other's imports, marking a de-escalation in recent trade tensions. US Treasury secretary Scott Bessent told reporters that the two countries had agreed to lower their tariffs by 115% for 90 days, following negotiations in Switzerland over the weekend. Read more: FTSE 100 LIVE: Stocks cautiously higher as UK job market weakens Investors had been flocking to gold amid concerns over US president Donald Trump's tariff agenda, as it is considered to act a stable store of value, acting as a hedge in times of economic and political uncertainty. An easing of trade tensions on Monday, therefore, dented the precious metal's appeal, as investors pivoted back to stock markets. According to a Reuters report, KCM Trade chief market analyst Tim Waterer said there had been "some value-buying happening on gold at current levels which is helping to prop up the price, despite the generally better outlook for global growth with the US and China on better terms". "The consolidation move in the dollar has allowed the gold price to make a mild push higher," he said. The pound rose against the dollar (GBPUSD=X) on Tuesday, up 0.3% to $1.3208, supported by weakness in the greenback. The US dollar index, ( which measures the greenback against a basket of six currencies, dipped 0.3% to 101.53 at the time of writing, as optimism over the US-China tariff deal appeared to wane slightly. Meanwhile, data released by the Office for National Statistics (ONS) on Tuesday, showed that UK pay growth slowed in the three months to March. The rate of unemployment also inched higher in that period, while the number of job vacancies fell in the three months to April and early estimates showed that the number of payrolled employees fell last month. This all signalled that the UK jobs market had started to cool. Neil Wilson, UK investor strategist at Saxo Bank, said that "UK employment data shows cracks emerging, which supports a more dovish bias from the Bank of England (BoE)". Read more: UK pay growth slows as job market cools amid uncertainty He added that the "BoE should not be hanging about and get in there with cuts, the inflation is not the problem now". Meanwhile, data from the British Retail Consortium, also published on Tuesday, showed a 7% increase year-on-year in UK retail sales. That was up from a 4% decline recorded in April 2024 and was above average three-month growth of 2.9% and a 12-month average of 1.4%. Derren Nathan, head of equity research at Hargreaves Lansdown, said: "This was boosted both by the favourable timing of Easter and the sunniest April on record. A more meaningful comparison looked at March and April combined. "Here the trend still moved in the right direction but to the much smaller tune of 0.2% which is unlikely to offset the impact of higher wages and employers' National Insurance contributions on profits." In other currency moves, the pound rose against the euro (GBPEUR=X), up 0.2% to trade at €1.1887 at the time of writing. Oil prices were little changed on Tuesday morning, as investors weighed the latest developments around global trade. Brent crude futures (BZ=F) traded at $64.93 a barrel, while West Texas Intermediate futures (CL=F) dipped 0.2% to $61.80 a barrel. Read more: Stocks that are trending today Nathan said: "Tariff optimism hasn't been enough to maintain the upward trajectory of Brent crude oil prices." "The loosening supply environment is keeping a lid on momentum, with OPEC+ signalling increased output in May and June and traders evaluating the prospect of lighter sanctions on Iran and Russia." More broadly, the FTSE 100 (^FTSE) was muted on Tuesday morning, trading at 8,605 points at the time of writing. For more details, check our live coverage here. Read more: Pension funds deal to back £50bn of investment for UK private markets and infrastructure Bank of England interest rate-setters want inflation down before more cuts Why it's important to plan for retirement with your partnerError 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
Yahoo
08-05-2025
- Business
- Yahoo
Gold falls as investors eye potential UK-US trade deal
Gold prices fell on Thursday morning, on hopes that a potential trade deal between the UK and US would be announced later in the day. In a social media post on Wednesday, US president Donald Trump teased that a trade deal announcement would be coming on Thursday, with a news conference to be held at 10am ET. He said that the conference concerns a "MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!" Bloomberg reported that, according to people familiar with the matter, the agreement is expected to be with the UK. Following the reports, while US stock futures rose, while UK stocks were little changed shortly after the market open. Stocks: Create your watchlist and portfolio As investor concerns around tariffs eased, gold futures (GC=F) fell 1.5% to $3,342.40 per ounce, while the spot gold price declined 0.6% to $3,344.04 per ounce. Investors have been turning to gold amid uncertainty over Trump's tariff agenda, as the precious metal is considered to act as a safe haven investment. Bank of America (BAC) commodity strategist Michael Widmer said in a note on Wednesday that the "surge in gold investment demand driving up prices to record levels has been offset by sharply lower jewellery purchases. As such, our supply/demand model suggests that gold can trade comfortably above $3,000/oz, but not above $3,500/oz for now, especially if trade disputes ease." "For another push higher, investment in the yellow metal would need to increase, while jewellery demand would have to stabilise," he said. The pound edged lower against the dollar on Thursday, down 0.1% to trade at £1.3274, at the time of writing. The US dollar index ( which measures the greenback against a basket of six currencies, was up 0.5% to 100.08 in early European trading. Jim Reid, market strategist at Deutsche Bank ( said: "In a Trump 2.0 world it often seems like the news flow doesn't really get going until after the US market closes and today is another example of that." "The media are all lining up behind the deal being with the UK," he said. "Given that full trade deals take years to negotiate, this will likely be a framework and it will be interesting to see whether the 10% baseline tariff stays as that will provide an important template for negotiations with other countries and a good guide to the long-term tariff strategy of the US." In addition to a potential US-UK trade deal, the Bank of England's (BoE) latest interest rate decision is also in focus. The BoE is expected to announce a 25 basis point cut on Thursday, which would lower the base rate to 4.25%. Read more: Stocks that are trending today Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "The combination of a weaker growth outlook and better than expected inflation offers enough wiggle room to cut." Meanwhile, he said that it "wasn't a huge surprise" to see the US Federal Reserve hold rates steady on Wednesday, but added that this "will come as a blow to president Trump, who has been pushing hard for the Fed to abandon its independence and deliver lower rates for Americans." "For markets, a stable and independent Fed is a positive, and comments around the risks of both higher inflation and unemployment didn't do much to upset the apple cart," Britzman said. "US markets ended [Wednesday] in the green, and futures point to a positive open today as investors choose to focus on the potential US-China meeting this weekend – at this stage, any sign of easing tensions is likely to be welcomed." In other currency moves, the pound moved slightly higher against the euro (GBPEUR=X), up 0.1% to trade at €1.1763 at the time of writing. Hopes of easing trade tensions also supported a rise in oil prices on Thursday. However, prices remain at their lowest point since 2021, amid uncertainty over tariffs and fears that they could lead to an economic slowdown that would weigh on global fuel demand. Brent crude futures (BZ=F) were up 0.4%, to trade at $61.37 a barrel, while West Texas Intermediate futures (CL=F) climbed 0.6%, hitting $58.39 a barrel. Read more: FTSE 100 LIVE: Stocks rise as Bank of England expected to cut UK interest rates Hargreaves Lansdown's Britzman said that the rise in oil prices was "helped by a bigger-than-expected drop in US crude stockpiles and hints of a potential supply correction. But despite the rebound, prices are still hovering near multi-year lows, with lingering pressure from weak demand signals, rising gasoline prices, and ongoing US-China trade uncertainty." "On top of that, OPEC+ is moving to ramp up production, and the Fed held rates steady while warning that economic uncertainty isn't going anywhere," he added. More broadly, the FTSE 100 (^FTSE) was little changed on Thursday morning, trading at 8,555 points. Read more: The most bought stocks and funds for investors in April UK house prices rise for the first time since January UK taxes may need to rise in autumn, Rachel Reeves warnedError 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
Yahoo
07-05-2025
- Business
- Yahoo
Oil prices rise amid US-China trade talk optimism
Oil prices rose on Wednesday morning, amid investor optimism around trade talks between the US and China, which are due to begin this week. Brent crude futures (BZ=F) were up 1.5%, to trade at $63.07 a barrel, while West Texas Intermediate futures (CL=F) climbed 1.7%, hitting $60.12 a barrel. The talks are due to take place in Switzerland on Saturday and Sunday, it was announced on Tuesday. On the US side, the talks will be led by Treasury secretary Scott Bessent and chief trade negotiator Jamieson Greer, while China be respresented by by vice premier He Lifeng. Bessent said in an interview on Fox News on Tuesday that the talks would focus on de-escalation rather than a major trade deal. Read more: FTSE 100 LIVE: Stocks lacklustre as US and China set to start trade war talks "We've got to de-escalate before we move forward,' he said. 'We don't want to decouple, what we want is fair trade." Meanwhile, in a statement released after the talks were announced, China's ministry of commerce called on the US to "show sincerity" in the talks. Escalating trade tensions between the US and China, as well as comments around broader tariffs by US president Donald Trump, have fuelled further volatility in markets over investor concerns that this could lead to an economic slowdown. Fears around the impact of a recession on fuel demand have weighed on prices. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Oil prices have continued to rise amid some hopes of a rapprochement with China and the US. There are also signs of weaker production in the United States which has helped brent crude, the benchmark, make fresh gains. Analysis from Diamondback Energy estimates that the number of rigs operating in the US is expected to be around 10% lower in the second quarter." NY Mercantile - Delayed Quote • USD (BZ=F) View Quote Details 62.55 - +(0.64%) As of 7:51:42 AM EDT. Market Open. Advanced Chart The pound dipped 0.2% against the dollar (GBPUSD=X) to trade at $1.3351 at the time of writing, as investors braced for the US Federal Reserve's interest rate decision later on Wednesday. The US dollar index ( which measures the greenback against a basket of six currencies, was up 0.2% to 99.46 in early European trading. CCY - Delayed Quote • USD (GBPUSD=X) View Quote Details 1.3349 - (0.00%) As of 1:01:25 PM GMT+1. Market Open. Advanced Chart "The Fed is widely expected to keep rates on hold due to the unpredictability of US trade policy, despite calls from Trump for cuts," said Streeter. "The US economy contracted on an annual basis in the first quarter, but it was partly due to erratic buying behaviour, with imports surging as businesses stockpiled in a defensive move to try to minimise the worst of the initial wave of tariffs."
