Latest news with #GeorgeVessey
Zawya
7 days ago
- Business
- Zawya
Sterling ticks higher as strong data, trade deal buffer against stronger dollar
The pound ticked higher versus the dollar on Thursday, one of the few major currencies holding its ground against the greenback which earlier surged after a court blocked U.S. President Donald Trump from imposing import tariffs on other countries. At 0942 GMT, the pound was up 0.12% against the dollar at 1.347. Elsewhere, the euro, Japanese yen and Swiss franc all fell versus the dollar. Nevertheless the pound remains a fraction below the 1.359 level touched on Tuesday, its highest against the greenback since February 2022. "Due to the court ruling that Trump's tariffs are illegal, the pound has given back a chunk of gains made against the U.S. dollar," said George Vessey, lead FX & Macro Strategist at Convera in a note, though he added it remains above its 21-day moving average, a signal that a recent uptrend is still intact. The pound has gained almost 8% against the dollar in 2025 and is on track for its fourth consecutive monthly rise, as investors react to uncertain U.S. trade policy. It has also been boosted by strong data, including retail sales last week as well as the announcement of a UK-U.S. trade deal earlier this month. "GBP has done well in recent weeks on the back of U.S. and EU trade/reset deals, above-forecast consumer spending and less crowded positioning," said Kenneth Broux, head of corporate research FX and rates at Societe Generale, also flagging that the market is pricing fewer Bank of England rate cuts. Last week's inflation print led traders to scrap bets for a cut at the BoE's meeting scheduled for June, with more than 97% of traders now expecting the central bank to hold rates. The central bank slashed the bank rate by 0.25 percentage points to 4.25% on May 8. The Confederation of British Industry said on Thursday that business confidence in Britain's services sector hit a two-and-a-half-year low in the quarter to May. Data from market researcher Kantar on Wednesday showed British grocery price inflation jumped to 4.1% for the four weeks to May 18, its highest level since February last year. Against the euro, the pound was up 0.1% at 83.72, on track for its seventh straight week of gains. (Reporting by Lucy Raitano; Editing by David Holmes)
Reuters
29-05-2025
- Business
- Reuters
Sterling ticks higher as strong data, trade deal buffer against stronger dollar
May 29 (Reuters) - The pound ticked higher versus the dollar on Thursday, one of the few major currencies holding its ground against the greenback which earlier surged after a court blocked U.S. President Donald Trump from imposing import tariffs on other countries. At 0942 GMT, the pound was up 0.12% against the dollar at 1.347 . Elsewhere, the euro, Japanese yen and Swiss franc all fell versus the dollar. Nevertheless the pound remains a fraction below the 1.359 level touched on Tuesday, its highest against the greenback since February 2022. "Due to the court ruling that Trump's tariffs are illegal, the pound has given back a chunk of gains made against the U.S. dollar," said George Vessey, lead FX & Macro Strategist at Convera in a note, though he added it remains above its 21-day moving average, a signal that a recent uptrend is still intact. The pound has gained almost 8% against the dollar in 2025 and is on track for its fourth consecutive monthly rise, as investors react to uncertain U.S. trade policy. It has also been boosted by strong data, including retail sales last week as well as the announcement of a UK-U.S. trade deal earlier this month. "GBP has done well in recent weeks on the back of U.S. and EU trade/reset deals, above-forecast consumer spending and less crowded positioning," said Kenneth Broux, head of corporate research FX and rates at Societe Generale, also flagging that the market is pricing fewer Bank of England rate cuts. Last week's inflation print led traders to scrap bets for a cut at the BoE's meeting scheduled for June, with more than 97% of traders now expecting the central bank to hold rates . The central bank slashed the bank rate by 0.25 percentage points to 4.25% on May 8. The Confederation of British Industry said on Thursday that business confidence in Britain's services sector hit a two-and-a-half-year low in the quarter to May. Data from market researcher Kantar on Wednesday showed British grocery price inflation jumped to 4.1% for the four weeks to May 18, its highest level since February last year. Against the euro, the pound was up 0.1% at 83.72, on track for its seventh straight week of gains.
The Sun
20-05-2025
- Business
- The Sun
Weakening dollar reflects growing disinterest in ‘Brand USA'
NEW YORK: Trade-related uncertainties, ballooning fiscal debt and weakened confidence about enduring US exceptionalism have weighed on US assets, with the dollar one casualty. Investors see the currency losing more of its luster as the greenback comes back to earth from lofty valuations. The Trump administration's tariffs salvo this year prompted investors to cut exposure to US assets after a long period of overperformance. While the US currency steadied somewhat in recent sessions as investors took heart from a truce in the ongoing US-China trade war, it came under renewed selling pressure after ratings agency Moody's cut the US' pristine sovereign credit rating by one notch. 'There's plenty of room for further depreciation, purely from a valuation perspective,' said George Vessey, lead FX and macro strategist at payments firm Convera. The 'sell America' trade was back in focus after Moody's US credit downgrade, he said. The US dollar index has tumbled as much as 10.6% from its January highs, one of the sharpest retreats for a three-month period, leaving speculators net short the dollar to the tune of US$17.32 billion (RM74 billion), close to the most bearish position on the buck since July 2023, according to CFTC data. Part of the bearishness around the dollar has been due to the currency trading at a relatively rich valuation – in January trading as high as 22% above its 20-year average of 90.1 on the dollar index. Currently, the index is hovering about 10% above its 20-year average level. There is room for it to weaken significantly further, for example another 10% slide would take it to the lows touched during President Donald Trump's first term. Investors and strategists have viewed the dollar as overvalued for years but betting against the currency has proved painful time and again, as the US economy powered on. That could be about to change. Steve Englander, head of global G10 FX Research at Standard Chartered in New York, said that while recent trade arrangements might calm markets some, they do not address long-term confidence issues facing the US. 'The dollar weakness story is not over,' said Englander. Investors are also concerned about the long-term fiscal picture for the US. Analysts say Trump's sweeping tax-cut bill would add US$3 trillion to US$5 trillion to the nation's US$36.2 trillion in debt over the next decade. 'The combination of diminished appetite to buy US assets and the rigidity of a US fiscal process that locks in very high deficits is what is making the market very nervous,' George Saravelos, global head of FX research at Deutsche Bank, said in a note. The Trump administration has said it backs a strong-dollar policy. 'President Trump has been unequivocally clear about maintaining the strength and power of the US dollar as the world's reserve currency,' White House spokesman Kush Desai said. Despite recent foreign selling, years of US asset appreciation mean the world still holds trillions in US equities and Treasuries. Such selling pressure could come from various corners of the globe as more people zero in on the dollar's recent failure to act as a haven, investors said. 'That's really what gave people a jolt ... and say 'Well, if the dollar is no longer acting as a safe-haven currency, if it's not diversifying us any longer, should we really be holding this much of it?'' said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management. Colin Graham, head of multi-asset strategies at Robeco in London, however, said that while there had been a rebalancing of portfolios where people wanted to cut risk, 'it hasn't turned into people selling dollars, assets or equities or Treasuries to repatriate yet.' That could still follow, he said. The dollar's strength over the last decade had let market participants hold US assets without worrying too much about currency risk. With foreign holdings of US assets in trillions of dollars, per estimates from banks including Deutsche Bank, even a modest rise in hedge ratios – the portion of foreign currency exposure that is protected – could spell significant selling. Increased hedging by investors means less direct demand for the dollar and more dollar selling pressure in the forward markets. Asian economies including China, South Korea, Singapore and Taiwan have accumulated massive USD exposure as a result of a decades-long trend of investing big trade surpluses in US assets. An unprecedented two-day surge in Taiwan's currency in early May showed investors how a scramble out of the US dollar could roil markets. Eurizon SLJ Capital's Stephen Jen and Joana Freire said in a note in early May that USD hoardings of about US$2.5 trillion by Asian exporters and institutional investors 'pose sharp downside risks to the dollar vis-à-vis these Asian currencies.' – Reuters
Malay Mail
20-05-2025
- Business
- Malay Mail
Dollar decline accelerates as Moody's downgrade fuels sell-off and ‘Brand USA' falls out of favour
Investors still see dollar as overvalued even after recent fall Further rebalancing of global portfolios away from USD assets poses risk to the buck Rise in FX hedge ratios could add selling pressure Some investors looking to sell dollar rallies NEW YORK, May 20 — Trade-related uncertainties, ballooning fiscal debt and weakened confidence about enduring US exceptionalism have weighed on US assets, with the dollar one casualty. Investors see the currency losing more of its lustre as the greenback comes back to earth from lofty valuations. The Trump administration's tariffs salvo this year prompted investors to cut exposure to US assets after a long period of overperformance. While the US currency steadied somewhat in recent sessions as investors took heart from a truce in the ongoing US-China trade war, it came under renewed selling pressure after ratings agency Moody's cut the United States' pristine sovereign credit rating by one notch. 'There's plenty of room for further depreciation, purely from a valuation perspective,' said George Vessey, lead FX and macro strategist at payments firm Convera. The 'sell America' trade was back in focus after Moody's US credit downgrade, he said. The US dollar index has tumbled as much as 10.6 per cent from its January highs, one of the sharpest retreats for a three-month period, leaving speculators net short the dollar to the tune of US$17.32 billion (RM74.2 billion), close to the most bearish position on the buck since July 2023, according to CFTC data. Part of the bearishness around the dollar has been due to the currency trading at a relatively rich valuation — in January trading as high as 22 per cent above its 20-year average of 90.1 on the dollar index. Currently, the index is hovering about 10 per cent above its 20-year average level. There is room for it to weaken significantly further, for example another 10 per cent slide would take it to the lows touched during President Donald Trump's first term. Long-term concerns Investors and strategists have viewed the dollar as overvalued for years but betting against the currency has proved painful time and again, as the US economy powered on. That could be about to change. Steve Englander, head of global G10 FX Research at Standard Chartered in New York, said that while recent trade arrangements might calm markets some, they do not address long-term confidence issues facing the US 'The dollar weakness story is not over,' said Englander. Investors are also concerned about the long-term fiscal picture for the United States. Analysts say Trump's sweeping tax-cut bill would add US$3 trillion to US$5 trillion to the nation's US$36.2 trillion in debt over the next decade. 'The combination of diminished appetite to buy US assets and the rigidity of a US fiscal process that locks in very high deficits is what is making the market very nervous,' George Saravelos, global head of FX research at Deutsche Bank, said in a note. The Trump administration has said it backs a strong-dollar policy. 'President Trump has been unequivocally clear about maintaining the strength and power of the US dollar as the world's reserve currency,' White House spokesperson Kush Desai said. Foreign holdings Despite recent foreign selling, years of US asset appreciation mean the world still holds trillions in US equities and Treasuries. Such selling pressure could come from various corners of the globe as more people zero in on the dollar's recent failure to act as a haven, investors said. 'That's really what gave people a jolt... and say 'Well, if the dollar is no longer acting as a safe-haven currency, if it's not diversifying us any longer, should we really be holding this much of it?'' said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management. Colin Graham, head of multi-asset strategies at Robeco in London, however, said that while there had been a rebalancing of portfolios where people wanted to cut risk, 'it hasn't turned into people selling dollars, assets or equities or Treasuries to repatriate yet.' That could still follow, he said. Unhedged risk The dollar's strength over the last decade had let market participants hold US assets without worrying too much about currency risk. With foreign holdings of US assets in trillions of dollars, per estimates from banks, including Deutsche Bank, even a modest rise in hedge ratios — the portion of foreign currency exposure that is protected — could spell significant selling. Increased hedging by investors means less direct demand for the dollar and more dollar selling pressure in the forward markets. Asian economies including China, South Korea, Singapore and Taiwan have accumulated massive USD exposure as a result of a decades-long trend of investing big trade surpluses in US assets. An unprecedented two-day surge in Taiwan's currency in early May showed investors how a scramble out of the US dollar could roil markets. Eurizon SLJ Capital's Stephen Jen and Joana Freire said in a note in early May that USD hoardings of about US$2.5 trillion by Asian exporters and institutional investors 'pose sharp downside risks to the dollar vis-à-vis these Asian currencies.' One counter-argument to the bearish dollar story, however, is the resilience of the US economy. Should economic growth surprise on the upside, it could keep the US Federal Reserve on hold for longer and support the buck. Jack McIntyre, portfolio manager at Brandywine Global, noted that US consumers have remained resilient so far in the face of bets on weakness. Still, he and others were more inclined to sell rallies in the dollar than bet on a rebound. 'The story is more kind of looking for opportunities to sell dollars on strength right now,' McIntyre said. — Reuters
Malay Mail
20-05-2025
- Business
- Malay Mail
Dollar decline accelerates as Moody's downgrade fuels selloff and ‘Brand USA' falls out of favour
Investors still see dollar as overvalued even after recent fall Further rebalancing of global portfolios away from USD assets poses risk to the buck Rise in FX hedge ratios could add selling pressure Some investors looking to sell dollar rallies NEW YORK, May 20 — Trade-related uncertainties, ballooning fiscal debt and weakened confidence about enduring US exceptionalism have weighed on US assets, with the dollar one casualty. Investors see the currency losing more of its lustre as the greenback comes back to earth from lofty valuations. The Trump administration's tariffs salvo this year prompted investors to cut exposure to US assets after a long period of overperformance. While the US currency steadied somewhat in recent sessions as investors took heart from a truce in the ongoing US-China trade war, it came under renewed selling pressure after ratings agency Moody's cut the United States' pristine sovereign credit rating by one notch. 'There's plenty of room for further depreciation, purely from a valuation perspective,' said George Vessey, lead FX and macro strategist at payments firm Convera. The 'sell America' trade was back in focus after Moody's US credit downgrade, he said. The US dollar index has tumbled as much as 10.6 per cent from its January highs, one of the sharpest retreats for a three-month period, leaving speculators net short the dollar to the tune of US$17.32 billion (RM74.2 billion), close to the most bearish position on the buck since July 2023, according to CFTC data. Part of the bearishness around the dollar has been due to the currency trading at a relatively rich valuation — in January trading as high as 22 per cent above its 20-year average of 90.1 on the dollar index. Currently, the index is hovering about 10 per cent above its 20-year average level. There is room for it to weaken significantly further, for example another 10 per cent slide would take it to the lows touched during President Donald Trump's first term. Long-term concerns Investors and strategists have viewed the dollar as overvalued for years but betting against the currency has proved painful time and again, as the US economy powered on. That could be about to change. Steve Englander, head of global G10 FX Research at Standard Chartered in New York, said that while recent trade arrangements might calm markets some, they do not address long-term confidence issues facing the US 'The dollar weakness story is not over,' said Englander. Investors are also concerned about the long-term fiscal picture for the United States. Analysts say Trump's sweeping tax-cut bill would add US$3 trillion to US$5 trillion to the nation's US$36.2 trillion in debt over the next decade. 'The combination of diminished appetite to buy US assets and the rigidity of a US fiscal process that locks in very high deficits is what is making the market very nervous,' George Saravelos, global head of FX research at Deutsche Bank, said in a note. The Trump administration has said it backs a strong-dollar policy. 'President Trump has been unequivocally clear about maintaining the strength and power of the US dollar as the world's reserve currency,' White House spokesperson Kush Desai said. Foreign holdings Despite recent foreign selling, years of US asset appreciation mean the world still holds trillions in US equities and Treasuries. Such selling pressure could come from various corners of the globe as more people zero in on the dollar's recent failure to act as a haven, investors said. 'That's really what gave people a jolt... and say 'Well, if the dollar is no longer acting as a safe-haven currency, if it's not diversifying us any longer, should we really be holding this much of it?'' said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management. Colin Graham, head of multi-asset strategies at Robeco in London, however, said that while there had been a rebalancing of portfolios where people wanted to cut risk, 'it hasn't turned into people selling dollars, assets or equities or Treasuries to repatriate yet.' That could still follow, he said. Unhedged risk The dollar's strength over the last decade had let market participants hold US assets without worrying too much about currency risk. With foreign holdings of US assets in trillions of dollars, per estimates from banks, including Deutsche Bank, even a modest rise in hedge ratios — the portion of foreign currency exposure that is protected — could spell significant selling. Increased hedging by investors means less direct demand for the dollar and more dollar selling pressure in the forward markets. Asian economies including China, South Korea, Singapore and Taiwan have accumulated massive USD exposure as a result of a decades-long trend of investing big trade surpluses in US assets. An unprecedented two-day surge in Taiwan's currency in early May showed investors how a scramble out of the US dollar could roil markets. Eurizon SLJ Capital's Stephen Jen and Joana Freire said in a note in early May that USD hoardings of about US$2.5 trillion by Asian exporters and institutional investors 'pose sharp downside risks to the dollar vis-à-vis these Asian currencies.' One counter-argument to the bearish dollar story, however, is the resilience of the US economy. Should economic growth surprise on the upside, it could keep the US Federal Reserve on hold for longer and support the buck. Jack McIntyre, portfolio manager at Brandywine Global, noted that US consumers have remained resilient so far in the face of bets on weakness. Still, he and others were more inclined to sell rallies in the dollar than bet on a rebound. 'The story is more kind of looking for opportunities to sell dollars on strength right now,' McIntyre said. — Reuters
