Latest news with #EURUSD
Globe and Mail
3 days ago
- Business
- Globe and Mail
Dollar Supported by Trade Optimism and Higher Bond Yields
The dollar index (DXY00) today is up by +0.18%. The dollar today is adding to Tuesday's gains on positive carryover from President Trump's action over the past weekend to extend the deadline for a 50% tariff on US importers of EU goods by about 5 weeks to July 9 from June 1. The dollar also has support from higher T-note yields. Gains in the dollar are limited by some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. The US May Richmond Fed manufacturing survey rose by +4 to -9, right on expectations. The markets are discounting the chances at 2% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) today is down by -0.11%. Today's dollar strength is undercutting the euro. Also, weaker-than-expected economic news is weighing on the euro after German May unemployment rose more than expected and after German Apr import prices fell more than expected, dovish factors for ECB policy. Losses in the euro are limited after the ECB's Apr 1-year CPI expectations were the highest in 14 months, a hawkish factor for ECB policy. The ECB Apr 1-year CPI expectations indicator of +3.1% y/y was stronger than expectations of +2.8% y/y and the highest in 14 months. The ECB Apr 3-year CPI expectations indicator was unchanged from March at +2.5% y/y, right on expectations. German May unemployment rose by +34,000, higher than expectations of +12,000 and the most in 2-3/4 years. The May unemployment rate was unchanged at 6.3%, right on expectations. The German Apr import price index fell -1.7% m/m, a bigger decline than expectations of -1.4% m/m and the largest drop in more than two years. Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) today is up by +0.24%. The yen today added to Tuesday's sharp losses and fell to a 1-week low against the dollar on negative carryover from Tuesday when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. Also, higher T-note yields today are bearish for the yen. June gold (GCM2 5) today is up +4.10 (+0.12%), and July silver (SIN2 5) is down -0.021 (-0.06%). Precious metals today are mixed on consolidation after Tuesday's sharp losses. Demand for gold as an inflation hedge rose today after the ECB's Apr 1-year CPI expectations indicator of +3.1% y/y was stronger than expectations of +2.8% y/y and the highest in 14 months. In addition, precious metals prices have continued safe-haven support from uncertainty about global trade relations and geopolitical tensions in Ukraine and the Middle East. Bearish factors for precious metals include today's stronger dollar and higher global bond yields. Silver prices are also under pressure on concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
Business Standard
6 days ago
- Business
- Business Standard
Dollar index tanks below 99 mark amid Trump tariff uncertainty
The dollar index is lingering at an over one month low on Monday morning in Asia as US President Donald Trump stayed uncertain on his trade stance, denting investors confidence on US assets. Donald Trump extended a deadline for EU trade deal until 9 July, following a call with European Commission president. Trump had threatened to impose 50 percent tariffs on imports from the European Union beginning June 1st, claiming talks with the bloc are "going nowhere." The US dollar index that measures the greenback against a basket of currencies is quoting lower at 98.74. The index tanked below 99 mark amid a steady decline since hitting above 101 mark earlier in the month. Growing concerns around the US fiscal outlook is also adding pressure on the greenback. Meanwhile, EURUSD and GBPUSD recovered some of its lost ground and are quoting higher by 0.3% at $1.1421 and $1.3578 respectively. Meanwhile, Minneapolis Federal Reserve President Neel Kashkari reportedly said in a speech that he expects to see interest rates on hold for now as U.S. data have yet to show the full impact of tariffs, which could limit some losses in the counter.
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Dollar Remains Weak After US Credit Downgrade
The dollar index (DXY00) today slid to a 1-1/2 week low and is down by -0.15%. The dollar remains under pressure after Moody's Ratings late last Friday downgraded the US government's credit rating from Aaa to Aa1, citing a ballooning budget deficit and fiscal concerns. The downgrade puts the dollar's status as a global reserve currency into question and may prompt some investors to lighten up on their dollar assets. The markets are discounting the chances at 5% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) today is up by +0.17%. The euro today is moving higher due to weakness in the dollar. Gains in the euro are limited after today's news that German April producer prices contracted more than expected, which is a dovish factor for ECB policy. Also, dovish comments from ECB Governing Council members Knot and Wunsch were negative for the euro as they signaled support for additional ECB interest rate cuts. German Apr PPI fell -0.9% y/y, weaker than expectations of -0.6% y/y and the biggest decline in 6 months. ECB Governing Council member Knot said he 'can't rule out' another ECB interest rate cut in June, but it's 'too early' to make decisions without seeing fresh quarterly forecasts. ECB Governing Council member Wunsch said the Eurozone economy may need interest rates at 'mildly supportive' levels to ensure inflation doesn't fall below target after a series of shocks. Swaps are discounting the chances at 93% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) today is down by -0.16%. The yen today extended Monday's and climbed to a 1-1/2 week high against the dollar. The yen found support today from rising Japanese government bond yields after the 10-year JGB bond yield jumped to a 7-week high of 1.532%. Also, short covering pushed the yen higher today after Japanese Finance Minister Kato said he's arranging a bilateral meeting with US Treasury Secretary Bessent to discuss topics, including foreign exchange, at the Group of Seven meetings this week in Canada. Higher T-note yields today are limiting the upside in the yen. June gold (GCM2 5) today is up +47.50 (+1.47%), and July silver (SIN2 5) is up +0.418 (+1.29%). Precious metals today are sharply higher, with gold climbing to a 1-week high. Dollar weakness is bullish for precious metals after the dollar index fell to a 1-1/2 week low today. Also, last Friday's action by Moody's Ratings to downgrade the US government's credit rating is fueling demand for precious metals as a store of value. In addition, strong gold demand from China is supporting prices after China imported 127.5 MT of gold in April, the most in 11 months. Gains in precious metals accelerated today on dovish comments from ECB Governing Council members Knot and Wunsch, who signaled they support additional ECB interest rate cuts. Finally, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Israeli Prime Minister Netanyahu announced an 'unprecedented attack' on Hamas and said Israel would take over the entire Gaza Strip. Also, Israel's airstrikes on Houthi rebels in Yemen continue. Higher global bond yields today are negative for precious metals. Also, fund liquidation of long gold positions continues to weigh on prices due to the easing of US-China trade tensions after China and the US recently agreed to reduce tariffs on each other's goods. Long gold positions in ETFs fell to a 6-week low on Monday.
Business Standard
09-05-2025
- Business
- Business Standard
Dollar index spikes above 100 mark to around 1-month high; BoE rate cut supports
The dollar index climbed well over 100 mark amid optimism surrounding US-UK trade deal and upbeat US data. US President Donald Trump reportedly announced a major trade deal with the United Kingdom, though key tariffs will remain at 10%. Meanwhile, US jobless claims fell to 228,000, beating market expectations and suggesting labor market strength. Hawkish stance by US Fed in its recent policy meet and BoE interest rate cut by 25 bps is further boosting greenback against the pound. The dollar index that measures the greenback against a basket of currencies is trading at 100.45, its highest level in almost a month. Among basket currencies, EURUSD and GBPUSD are trading slightly lower at $1.1253 and $1.3234 respectively.
Business Standard
08-05-2025
- Business
- Business Standard
Dollar index largely steady despite Fed's cautious outlook
The dollar index stayed range bound under 100 mark even as the Federal Reserve kept interest rates unchanged and provided hawkish future stance citing continued uncertainty going ahead. The Fed held its key interest rate unchanged in a range between 4.25%-4.5% at the end of a two-day monetary policy meeting on Wednesday and stated that the uncertainty about the economic outlook has increased further. Fed Chair Jerome Powell noted that there is a great deal of uncertainty about tariffs and said that the right thing to do is wait for further clarity. This suggests that the US central bank is not leaning toward cutting rates anytime soon. This however failed to boost the dollar index. However, renewed uncertainty on trade tariff kept the greenback supported as US President Donald Trump reduced hopes for a quick resolution to the US-China trade war by saying that he is in no real hurry to sign any deals. The dollar index that measures the greenback against a basket of currencies is currently seen quoting at 99.77, up 0.27% on the day but largely steady since the last few days. Among the basket currencies, EURUSD and GBPUSD are quoting slightly lower at $1.1332 and $1.3324 respectively.
