Latest news with #G-10
Mint
18 hours ago
- Business
- Mint
Weak UK Jobs Data Sends Down Pound and Boosts BOE Rate Cut Bets
The pound fell and UK bonds rallied as traders added to bets on interest-rate cuts from the Bank of England after data showed a sharp deterioration in the labor market. Sterling fell as much as 0.7% to $1.3456 on Tuesday, heading for its worst day in a month and leading losses among Group-of-10 currencies. Gilts outperformed euro-area peers, with yields down five to six basis points across the curve. UK employment plunged by the most in five years and wage growth slowed more than forecast, data released on Tuesday showed. That increased traders' conviction that the BOE will deliver two more quarter-point rate cuts this year. 'The UK labour market does seem to be weakening at the margin,' said Mike Riddell, a portfolio manager at Fidelity International, who has a small long position in gilts up to the 10-year maturity and a moderate short position in the pound. If the weakening continues at this pace, the BOE will 'resort to quarterly cuts,' he added. The BOE has already lowered borrowing costs twice this year, bringing the benchmark to 4.25%. Money markets are now fully pricing another reduction in September and see a 90% chance of anoter move by December, up from about 60% on Monday. Gilt yields fell six to seven basis points across the curve. The two-year rate — the most sensitive to monetary policy chances — dropped seven basis points to 3.94%, the lowest in a month. Expectations of lower interest rates and falling bond yields reduced the appeal of the pound, which hit its lowest level against the euro in nearly three weeks. That marks its strongest reaction to a UK payrolls report since September. Still, sterling is one of the highest yielding G-10 currencies and has been bolstered by an uptick in risk sentiment and demand for carry trades. The currency last week touched its strongest level since February 2022. 'The dovish repricing of BOE rate-cut expectations takes some of the shine of the pound,' said Lee Hardman, a senior currency analyst at MUFG. But it's 'unlikely on its own to reverse the recent upward trend unless the BOE signals it is more willing to speed up rate cuts.' What Bloomberg Strategists Say... 'While both headline and private-wage growth slowed, investors need to keep in mind that numbers above 5% are patently incompatible with the idea of 2% inflation, so it's premature to conclude that the path is clear for continued rate cuts.' — Ven Ram, Macro Strategist, Dubai Options markets indicate traders are increasingly divided on the pound's near-term direction. One-week risk reversals — which reflect the difference in demand for bullish versus bearish bets — are trading near parity, signaling uncertainty after six straight days of waning upside momentum. While the softer employment data may help ease concerns among BOE policymakers that pay rises are fueling inflation, consumer price growth remains sticky at 3.5%, above the target. The data 'puts the BOE in an exceptionally challenging situation,' said Zara Nokes, global market analyst at JP Morgan Asset Management. The labor market is 'clearly deteriorating' but inflation is still-elevated and that could keep the BOE 'firmly on hold' until there's more evidence of cooling inflation. The pound's slide helped boost UK stocks, with the export-heavy FTSE 100 index set to close at a record high. About 75% of revenue for the gauge's companies comes from abroad. With assistance from Sujata Rao. This article was generated from an automated news agency feed without modifications to text.
Wall Street Journal
02-05-2025
- Business
- Wall Street Journal
Yen Weakens Amid Risk-on Sentiment, Dimmer BOJ Rate-Hike Prospects
0041 GMT — The yen weakens against most other G-10 and Asian currencies in the early session amid risk-on sentiment spurred by Wall Street's gains and dimmer BOJ rate-hike prospects. It's risk positive, NAB's Rodrigo Catril says, noting tech stocks led U.S. equities higher overnight, thanks to better-than-expected earnings reports from Microsoft and Meta. Also, the language of the BOJ's statement on Thursday had a cautious undertone with the central bank saying 'risks to prices skewed to downside for FY 2025 and FY 2026,' the senior FX strategist says in a commentary. USD/JPY rises 0.3% to 145.87; AUD/JPY gains 0.6% to 93.34. (
Bloomberg
30-04-2025
- Business
- Bloomberg
FTSE 100 Live: UK Stocks Slip as US Economy Contracting Sours Mood
After a strong beginning and a torturously close final few minutes, the FTSE 100 finally snapped its longest winning streak since January 2017 today, closing lower after weak US economic data upset markets. Miners in particular weighed on the index following a warning on tariff disruption to the sector. The FTSE 250 narrowly eked out a gain, thanks in part to surge in Genus, helping it post its best month since November. The pound was the worst performing G-10 currency against the US dollar as it unwound recent gains to trade closer to $1.33. That shaved off a bit of its monthly gain, though April's still on course to be the best month since late 2023. Sterling also fell against the euro, at the end of what's set to be its worst month since the end of 2022. That's all from us at Markets Today for now. Join us again tomorrow for the start of a new month when we'll be taking you through all those earnings, along with everything else you need to know about UK markets.
Yahoo
17-04-2025
- Business
- Yahoo
The U.S. dollar's role as the de facto global reserve currency is looking increasingly uncertain
Volatility that gripped global markets over the past two weeks may be subsiding, at least for now. But some on Wall Street say that President Donald Trump's aggressive approach to rolling out his tariff agenda might trigger lasting consequence for U.S. markets. Specifically, the dollar's status as a reliable 'safe haven' has been tarnished, and its role as the de facto global reserve currency has been looking increasingly uncertain. My husband will inherit $180K. I think we should invest the money. He wants to pay off his $168K mortgage. Who's right? Dow sees first 'death cross' since 2023 — but here's the good news With fear gauge echoing 2022 turmoil, here's a new theory on when Trump will change course Wall Street predicts a 10% stock rebound by the end of 2025. Why investors shouldn't buy the hype just yet. Trump is furious that Fed won't cut interest rates like ECB. Here's why Powell won't budge. Signs of growing dissatisfaction with the dollar can be seen in the breakdown of its longstanding correlation with other markets. Steve Englander, head of global G-10 foreign-exchange research and North America macroeconomic strategy at Standard Chartered, highlighted the pattern, which has emerged since Trump's April 2 'liberation day' tariff announcement, in the chart below. 'The market clearly now has doubts,' Englander told MarketWatch via email. When investors start losing confidence in stocks and bonds, many often seek shelter in the global currency market. According to data from the Bank for International Settlements, the market for foreign currencies has become far more liquid than markets for stocks and bonds, with a daily turnover of $7.5 trillion as of 2022. Investors can shift in and out of currency positions 24 hours a day, except on weekends. For decades, the dollar, the Swiss franc and Japanese yen were among the most popular options for investors seeking calmer ports in volatile markets. But while the yen USDJPY, franc USDCHF and euro EURUSD have shot higher over the past few weeks, the ICE U.S. Dollar Index DXY, a popular gauge of the dollar's value against its main currency rivals, sank to its lowest level in three years. By comparison, the Swiss franc recently climbed to its strongest level in 14 years. The latest selloff wasn't the first time that global confidence in the dollar has been challenged, said Thierry Wizman, global FX and rates strategist at Macquarie Group. There was 'a lot of consternation' against the greenback during the early days of the financial crisis, beginning around mid-2007, Wizman said. Investors initially viewed the mortgage-bond meltdown as a uniquely American problem. However, by the time the European debt crisis was triggering bailouts in 2011, confidence in the greenback had been restored. This time, things feel different, Wizman said. Instead of shoring up confidence in the buck, Trump's embrace of tariffs seems intended to undermine a system that Washington previously pioneered. The policy shake-up not only threatens the dollar's status as a safe haven during times of market stress, it also could erode the dollar's status as the de facto global currency, Wizman said. That could unleash a host of negative consequences, including higher borrowing costs for the U.S. government and consumers. 'During the [financial crisis], there wasn't a movement in the U.S. to dismantle the international trade system or the international financial system. We had a financial shock, but if anything, the U.S. policymakers were proactive in trying to save the system, including through the use of diplomacy,' Wizman said. 'Now there's this perception that not only have the motivations changed, but the methodologies have changed. It speaks to a U.S. that is no longer the underwriter of its own system. Instead, the U.S. is going about disassembling that system in a non-diplomatic and abrupt way.' Any shift away from a system that places the dollar at the center of global commerce likely won't happen overnight, said Atul Bhatia, a fixed-income portfolio strategist at RBC Wealth Management. 'The network effects are strong,' he said. By some measures, the world has been shifting away from its dependence on the dollar for decades. Data from the International Monetary Fund show the dollar's share of global central-bank reserves has been shrinking since the late 1990s. However, its dominance in trade remains largely undiminished. According to data from Swift, an international interbank payments network, the dollar remains involved in nearly half of all global transactions. The dollar snapped a five-day losing streak on Tuesday. The ICE dollar index was up 0.5% around the time that the closing bell rang out on Wall Street. Still, the buck has fallen by more than 9% from its 52-week high on Jan. 13. Given its rapid shift lower, Bhatia said the buck might be due for a near-term bounce. After that, it will likely continue to weaken. 'There could be some tailwinds for the dollar here,' he said. 'But longer term, we think that folks are going to be looking toward their own markets and their own regions.' Given the degree of foreign holdings of U.S. assets, like stocks and bonds, this shift could have far-reaching consequences for Wall Street and Main Street savers alike. I'm administrator of my sister's estate. Her bank won't tell me the names of her beneficiaries. Is that legal? The day before Good Friday is often a great day for the stock market. Here's how today is shaping up. I held power of attorney for my late brother. Can I withdraw money from his bank account to give to his favorite charity? 'The whole thing feels predatory': My grandma, 97, pays $170 a month for a $10,000 life-insurance policy. Should we stop payments? Americans are 'doom buying' coffee, olive oil and soap. What's the one thing I should stockpile to avoid tariff price hikes? Sign in to access your portfolio
Wall Street Journal
15-04-2025
- Automotive
- Wall Street Journal
Yen Weakens Amid Improving Risk Appetite
0044 GMT — The yen weakens against most other G-10 and Asian currencies in early trade amid improving risk appetite spurred by overnight comments from U.S. and Fed officials. President Trump indicated that he's looking at offering some relief to auto sector by scaling back fresh tariffs, NAB's Ray Attrill says in commentary. Also, Fed governor Waller made dovish remarks about prioritizing the hit to growth over inflation if Trump proceeds with his April 2 tariff announcements, the head of FX Research adds. USD/JPY rises 0.3% to 143.45 and AUD/JPY adds 0.2% to 90.74, according to FactSet. (
