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Business Recorder
2 days ago
- Business
- Business Recorder
Dollar feeble on soft economic data, trade uncertainties
SINGAPORE: The dollar drifted in muted trading on Thursday after weak US economic data revived fears of slow growth and high inflation, while the euro was steady ahead of an expected interest rate cut from the European Central Bank. The soft data, which showed US services sector contracted for the first time in nearly a year in May and an easing labour market, led to a rally in Treasuries and increased the odds of interest rate cuts from the Federal Reserve this year. In Asian hours, currency market moves were tepid as investors were hesitant in making major bets, awaiting developments for fresh cues on the economy, tariffs and trade deals. Markets have been rattled since US President Donald Trump announced a slate of tariffs on countries around the globe on April 2, only to pause some and declare new ones, leading investors to look for alternatives to US assets. The greenback weakness has been the story of the year, with foreign exchange strategists surveyed by Reuters expecting further declines on mounting concerns about the US federal deficit and debt. On Thursday, the dollar was a shade higher against the yen at 143, while the euro stood at $1.1412, not far from the six-week high it touched at the start of the week. Sterling last fetched $1.3544. The dollar index, which measures the US currency against six others, was at 98.87 and has dropped about 9% this year, poised for its weakest yearly performance since 2017. Investors are now awaiting Friday's monthly payrolls figures to gauge the state of the labour market after payroll processing firm ADP reported that US private payrolls increased far less than expected in May. The more comprehensive employment report on Friday is expected to show that non-farm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, according to a Reuters survey of economists. The unemployment rate is forecast to hold steady at 4.2%. 'May's payrolls data tomorrow will be important to see if investor concerns are valid or overdone. A soft labour market report is likely to result in outsize falls in the US dollar,' said Mansoor Mohi-uddin, chief economist at Bank of Singapore. Trump redoubled his calls for Federal Reserve Chair Jerome Powell on Wednesday to lower interest rates after the ADP data was released, the latest attack that has stoked worries about the independence of the US central bank and rattled investors. Dollar slips after data disappoints Markets have priced in 56 basis points of rate cuts this year from the Fed, with traders pricing in a 95% chance for easing in September, LSEG data showed. The yield on the US 10-year Treasury note was at 4.363% in Asian hours, just above the four-week low of 4.349% it touched on Wednesday. In other currencies, the Australian dollar was steady at $0.6491, shrugging off Wednesday's weak GDP report while the New Zealand dollar was last at $0.603, just shy of a seven-month high.
Economic Times
2 days ago
- Business
- Economic Times
Dollar frail on weak economic data, trade uncertainty lingers
The dollar weakened due to concerns about the U.S. economy. Data indicated slow growth and inflation worries. The euro remained steady before the European Central Bank's expected rate cut. Investors are awaiting U.S. payrolls data. Trade tensions and potential Federal Reserve rate cuts are also impacting markets. The ECB is likely to cut rates to support the Eurozone economy. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads TRADE DEALS Tired of too many ads? Remove Ads The dollar softened on Thursday, stuck near six-week lows after weak U.S. economic data revived fears of slow growth and high inflation, while the euro was steady ahead of an expected interest rate cut from the European Central Bank The soft data, which showed U.S. services sector contracted for the first time in nearly a year in May and an easing labour market, led to a rally in Treasuries, with the yield on the U.S. 10-year Treasury note hovering at four-week dollar was a tad lower against the yen at 142.80, while the euro stood at $1.1424, not far from the six-week high it touched at the start of the week. Sterling last fetched $ have been rattled since U.S. President Donald Trump announced a slate of tariffs on countries around the globe on April 2, only to pause some and declare new ones, leading investors to look for alternatives to U.S. dollar weakness has been the story of the year, with foreign exchange strategists surveyed by Reuters expecting further declines on mounting concerns about the U.S. federal deficit and dollar index, which measures the U.S. currency against six others, was at 98.749 and has dropped about 9% this year, poised for its weakest yearly performance since are now awaiting Friday's monthly payrolls figures to gauge the state of the labour market after payroll processing firm ADP reported that U.S. private payrolls increased far less than expected in more comprehensive employment report on Friday is expected to show that non-farm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, according to a Reuters survey of economists. The unemployment rate is forecast to hold steady at 4.2%."May's payrolls data tomorrow will be important to see if investor concerns are valid or overdone. A soft labour market report is likely to result in outsize falls in the U.S. dollar," said Mansoor Mohi-uddin, chief economist at Bank of on Wednesday redoubled his calls for Federal Reserve Chair Jerome Powell to lower interest rates after the ADP data was have priced in 56 basis points of rate cuts this year from the Fed, with traders pricing in a 95% chance for easing in September, LSEG data other currencies, the Australian dollar was 0.22% higher at $0.6507, while the New Zealand dollar rose 0.24% to $ remain worried about U.S. trade negotiations and the lack of progress in hashing out deals ahead of the early July called China's Xi Jinping tough and "extremely hard to make a deal with" on Wednesday, exposing frictions after the White House raised expectations for a long-awaited phone call between the two leaders this will also be on Europe, where the central bank is widely expected to cut rates by 25 basis points later on Thursday. Investors will look for clues for what comes after that even as the case grows for a pause in its year-long easing ECB has cut rates seven times in 13 months as inflation eased from post-pandemic highs, seeking to prop up a euro zone economy that was struggling even before Trump's erratic economic and trade policy dealt it yet another blow."Lower energy prices, forthcoming fiscal stimulus, and reduced global recession risks warrant a wait-and-see approach to further policy moves," said Laura Cooper, head of macro credit and investment strategist at Nuveen."While a potential insurance cut could come in September, it will be contingent on incoming data - yet risks appear skewed to the upside amid depressed trade-led expectations."
Business Recorder
14-05-2025
- Business
- Business Recorder
Australia, New Zealand dollars maintain strong gains as global economy outlook brightens
SYDNEY: The Australian and New Zealand dollars basked in the glow of robust overnight gains on Wednesday, as the US and China de-escalated tariff tensions, brightening the outlook for the global economy and sparking a rebound in commodity prices. A pullback in the US dollar also worked in their favour. The Aussie inched up 0.1% to $0.6480, after jumping 1.6% overnight to move back above its 200-day moving average of $0.6454. That put it within a whisker of a five-month top of $0.6514 hit last week. The kiwi was also 0.1% higher at $0.5942, having rallied 1.3% overnight to be also back above its 200-day moving average of $0.5882. It is, however, still some distance away from a six-month peak of $0.6029. The outlook for the global economy has improved after the US and China agreed on Monday to temporarily slash their sky-high tariffs on each other, greatly lessening the risk of a recession and adding to the case for the Federal Reserve to hold on interest rate cuts for longer. Futures continued to scale back expectations for US policy easing, with just two quarter-point rate cuts priced in this year. Commodity prices bounced, with iron ore hitting the highest in over two weeks and copper climbing to six-week highs. Australia, New Zealand dollars gain on crosses as US, China reach tariff truce 'US recession risks have eased but we expect stagflation will still only let the Federal Reserve make one 25bps rate cut in 2025,' said Mansoor Mohi-uddin, chief economist at Bank of Singapore. 'The USD has rallied sharply… But the greenback's long-term outlook remains bearish as global investors turn cautious after the Trump administration's economic, foreign policy and trade shocks.' Data showed Australian wages rose at a faster-than-expected clip of 0.9% in the first quarter, although the gain was driven by government pay rises for care workers, suggesting the labour market should not be a bar to more policy easing. Swaps have fully priced in a rate cut from the Reserve Bank of Australia next week, and a total easing of 80 basis points has been priced in by the end of the year. 'Much of the strength in wages in Q1 has been driven by policy changes and will be temporary,' said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.
Straits Times
07-05-2025
- Business
- Straits Times
Singapore stocks dismiss Wall St losses to track regional gains; STI up 0.1%
On the STI, the top gainer was Yangzijiang Shipbuilding, which rose 5.8 per cent to $2.18. ST PHOTO: BRIAN TEO SINGAPORE – Local stocks disregarded losses on Wall Street overnight to track regional markets into positive territory on May 7. The gains were on the light side with the benchmark Straits Times Index (STI) inching up 0.1 per cent or 4.96 points to 3,865.37 although winners easily outpaced losers 302 to 194 on trade of 1.3 billion securities worth $1.7 billion. Elsewhere, Hong Kong's Hang Seng rose 0.1 per cent, Shanghai shares added 0.8 per cent, South Korea's Kospi gained 0.6 per cent and Malaysian stocks put on 0.9 per cent but Japan's Nikkei 225 fell 0.1 per cent. The gains came despite losses on Wall Street over investor concerns about the impact of US tariffs and the lack of trade deals The People's Bank of China announced its first interest rate cut since September to support economic activity. Mr Mansoor Mohi-uddin, chief economist at Bank of Singapore, said the move was modest ahead of Beijing's trade talks with Washington. 'We think the Trump administration's 145 per cent tariffs on China's goods will lead to an unsustainable US supply shock. A trade deal is thus likely in the next few months, enabling China's markets to rebound,' he added. The STI's top gainer was Yangzijiang Shipbuilding, up 5.8 per cent to $2.18, while Frasers Logistics & Commercial Trust led the decliners, down 4.4 per cent to 86.5 cents. Frasers posted a 13.8 per cent fall in distribution per unit to three cents for its first-half ended March 31, noting on May 7 that it faced challenges in its commercial portfolio and foreign exchange volatility. The local banks ended mixed. OCBC Bank gained 0.2 per cent to $16.27 while DBS Bank fell 0.5 per cent to $42.76 and UOB slipped 1.4 per cent at $34.49. UOB lost as much as 2.8 per cent during the session after posting flat first-quarter results that missed analyst expectations. The bank also halted its 2025 earnings guidance, citing macroeconomic uncertainties. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
07-05-2025
- Business
- Business Times
Singapore stocks track regional gains on Wednesday; STI up 0.1%
[SINGAPORE] Local stocks ended higher on Wednesday (May 7), tracking gains in the region. The benchmark Straits Times Index (STI) gained 0.1 per cent or 4.96 points to 3,865.37. Across the broader market, gainers outnumbered losers 302 to 194, after 1.3 billion securities worth S$1.7 billion changed hands. Elsewhere in the region, Hong Kong's Hang Seng Index rose 0.1 per cent and the Shanghai Stock Exchange Composite Index was up 0.8 per cent. South Korea's Kospi also gained 0.6 per cent, and Malaysia's KLCI was up 0.9 per cent. Meanwhile, Japan's Nikkei 225 fell 0.1 per cent. The People's Bank of China (PBOC) announced its first interest rate cut since September to support economic activity and investor sentiment, noted Mansoor Mohi-uddin, chief economist at Bank of Singapore. Mohi-uddin said Wednesday's moves were modest ahead of Beijing's trade talks with Washington. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'We think the Trump administration's 145 per cent tariffs on China's goods will lead to an unsustainable US supply shock. A trade deal is thus likely in the next few months, enabling China's markets to rebound,' he said. On the STI, the top gainer was Yangzijiang Shipbuilding, which rose 5.8 per cent or S$0.12 to S$2.18. Frasers Logistics & Commercial Trust (FLCT) was the top decliner, falling 4.4 per cent or S$0.04 to S$0.865. FLCT on Wednesday posted a 13.8 per cent fall in distribution per unit to S$0.03 for its first half ended March 31, as it faced transitional challenges in the commercial portfolio and foreign exchange volatility. The local banking trio ended mixed. OCBC gained 0.2 per cent or S$0.03 to S$16.27, while DBS fell 0.5 per cent or S$0.23 to S$42.76. UOB was down 1.4 per cent or S$0.49 at S$34.49. During the day, UOB lost as much as 2.8 per cent after posting flat Q1 results that missed analyst expectations. The bank also halted its 2025 earnings guidance, citing macroeconomic uncertainties.
