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Business Recorder
13 hours ago
- Business
- Business Recorder
Dollar dips after jobs-fueled rally
NEW YORK: The US dollar slipped against most major currencies on Monday, as optimism over a better-than-expected US employment report was offset by caution ahead of pivotal US-China trade talks set to take place later in the day. Top officials from both countries were in London for a meeting to address disagreements around a preliminary agreement struck last month in Geneva, which had briefly cooled tensions between the world's two largest economies. The talks come at a crucial time for both sides, with China grappling with deflation and trade uncertainty dampening sentiment among US businesses and consumers, prompting investors to reassess the dollar's safe-haven status. Data showed China's export growth slowed to a three-month low in May as US tariffs slammed shipments, while factory-gate deflation saw its worst level in two years. Customs data showed that China's exports to the US plunged 34.5% year-on-year in May in value terms, the sharpest drop since February 2020, when the outbreak of the COVID-19 pandemic upended global trade. The dollar was down about 0.2% against the Japanese currency at 144.635 yen in late morning trading after two consecutive weeks of gains. Japan is considering buying back some super-long government bonds issued in the past at low interest rates, two sources with direct knowledge of the plan said on Monday, underscoring its focus on reining in any abrupt rises in bond yields. The euro, meanwhile, was up slightly against the greenback at $1.1404, as markets continued to price in the European Central Bank's monetary policy outlook issued last week, in which it indicated it may be close to ending its easing cycle. Sterling also rose versus the greenback, adding 0.3% to $1.3558. 'The dollar is struggling to find clear direction following last week's data points and the situation is looking more like the second half of the year the Fed will need to get dovish and help the financial environment,' said Juan Perez, director of trading at Monex USA in Washington. 'Ultimately, if the US is going to be struggling, there is no clear reason to have any long-term faith in the dollar.' Elsewhere, China's offshore yuan was last at 7.18 per dollar, little changed on the day. 'How the (US-China) trade talks go definitely is going to be critical for overall sentiment,' said Kit Juckes, chief FX strategist at Societe Generale. He said Asia-Pacific currencies including the Japanese yen and Australian and New Zealand dollars would likely see the biggest reaction to headlines from the talks. New Zealand's dollar rose 0.5% to US$0.6045, while the Australian dollar was last up 0.3% at US$0.6515 in light volumes as markets were closed for a public holiday. Also on the trade front was a report that said Japan's chief trade negotiator Ryosei Akazawa is planning a sixth round of talks in Washington. An inflation report out of the US for May will be in the spotlight later in the week as investors and Federal Reserve policymakers look for evidence on the damage trade restrictive policies have had on the economy. Fed officials have signalled that they are in no rush to cut interest rates and signs of economic resilience will likely cement their stance. Interest rate futures indicate that investors are anticipating the central bank may cut borrowing costs by 25 basis points, with the earliest move expected in October this year, according to data compiled by LSEG. 'May is the first month where the impact of Trump's 10% universal tariff on imports ex-USMCA (United States-Mexico-Canada Agreement) is expected to show. The Fed will want a few months of inflation data in order to judge the tariff impact and most importantly, its persistence,' analysts at ANZ Bank said.
Business Recorder
6 days ago
- Business
- Business Recorder
Dollar slips after data disappoints
NEW YORK: The dollar fell across the board on Wednesday after weaker-than-expected US private payrolls data highlighted continued easing in the labor market and data showed US services sector contracted for the first time in about a year in May. US private payrolls rose by only 37,000 jobs in May, far less than expected, after a downwardly revised 60,000 rise in April, the ADP National Employment Report showed on Wednesday. Economists polled by Reuters had forecast private employment increasing 110,000 following a previously reported gain of 62,000 in April. The data prompted US President Donald Trump to reiterate his calls for Federal Reserve Chair Jerome Powell to lower interest rates. 'It's a major gap between expectation and actual,' Juan Perez, director of trading at Monex USA in Washington. Separately, data showed the US services sector contracted for the first time in nearly a year in May while businesses paid higher prices for inputs, a reminder that the economy remained in danger of a period of very slow growth and high inflation. The dollar was 0.6% lower against the Japanese yen at 143.165 yen. The euro rose 0.5% to $1.1424, ahead of the European Central Bank's decision on interest rates expected on Thursday. Investors are now looking to Friday's highly anticipated monthly payrolls figures to gauge the state of the labor market. Focus also remains on trade negotiations. The Trump administration has given a deadline of Wednesday for countries to submit their best offers on trade, the same day duties on imported steel and aluminium doubled. Trump is also tipped by the White House to have a call this week with Chinese President Xi Jinping, after the two sides accused each other of violating the terms of an agreement last month to roll back some tariffs. Trump on Wednesday posted on his social media platform that Xi was 'tough' and 'hard to make a deal with.' The Swiss franc rose 0.5% to 0.820 francs to the dollar, while the dollar index, which measures the currency against six others, was flat 0.3% lower on the day at 98.847, not far from its late April low of 97.923. The Hong Kong dollar was at 7.8469 per US dollar, the closest it has been to 7.85 - the weak end of its trading band against the US dollar - since August 2023, according to LSEG data. Sterling was 0.3% higher at $1.35585. The UK and its metal exports are exempt from the increased US duties, given Britain has a trade deal in place. In the meantime, traders were also keyed in on developments in Japanese markets after sources told Reuters the Bank of Japan is considering slowing down the pace of tapering in its bond purchases from next fiscal year onward. Elsewhere, the Canadian dollar was about 0.3% higher versus its US peer after the Bank of Canada on Wednesday held its key benchmark rate at 2.75%, citing the need to probe the effects of US trade policy. Bitcoin, the world's largest cryptocurrency by market capitalisation, was 1% lower on the day at $104,839.
CNA
22-05-2025
- Business
- CNA
US dollar modestly recovers, but sentiment still tense; euro wobbles
NEW YORK/LONDON :The U.S. dollar advanced on Thursday after three days of losses, as the House of Representatives narrowly passed President Donald Trump's bill for huge tax and spending cuts, even as the euro stumbled after data painted a bleak economic picture for the euro zone. Bitcoin, meanwhile, pushed to a new all-time high, partly as investors sought out alternatives to U.S. assets But Trump's sweeping tax bill has been the market's focus and its passage has been met partly with relief and partly with caution. The bill is set to add to the country's ballooning debt pile. The market is now looking at weeks of debate in the Republican-led Senate on it. The non-partisan Congressional Budget Office estimates the bill will add $3.8 trillion to the $36.2 trillion in U.S. debt over the next decade. "The dollar's up a touch today, but market nerves are pretty clearly quite frayed and all movements over the last few sessions have been very cautious," said Helen Given, director of trading at Monex USA in Washington. "The House's passage of the Trump administration's tax and spending bill is giving the buck a bit of a boost, but most of the flow we're looking at is more a reversal of substantial dollar shorts than anything else." In late morning trading, the dollar edged up 0.1 per cent to 143.75 yen after earlier dropping to 142.80, its weakest level since May 7. A low weekly jobless claims reading gave the dollar a bit of a lift as the labor market continued to show stability. The weekly report showed unemployment rolls approaching levels last seen in late 2021. Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 227,000 for the week ended May 17. Economists polled by Reuters had forecast 230,000 claims for the latest week. Meanwhile, a lacklustre 20-year bond sale on Wednesday reinforced the "Sell America" narrative and weighed on the dollar overnight. The soft auction also put some pressure on Wall Street as well, with traders already jittery after Moody's cut its triple-A U.S. credit rating last week. The euro, meanwhile, fell 0.3 per cent against the dollar to $1.1293, after rising on Wednesday for a third straight session. Euro zone business activity unexpectedly contracted this month, HCOB's preliminary composite Purchasing Managers' Index showed on Thursday. "The underwhelming release bodes poorly for the near-term economic prospects on the continent, with the effects of Donald Trump's tariffs slowly feeding through and the spectre of a trade deal seemingly unlikely at this juncture," said Harry Woolman, analyst at Validus Risk Management. Sterling was up 0.1 per cent at $1.3434 but remained close to a three-year peak reached on Wednesday after hot inflation dampened expectations for rate cuts from the Bank of England. The dollar index, which measures the U.S. currency against six peers, rose 0.2 per cent to 99.844, a little above yesterday's two-week low of 99.333. Bitcoin climbed as high as $111,862.98, a fresh all-time peak and a 3.3 per cent increase from Wednesday's close. "Investor sentiment has clearly shifted in favour of Bitcoin over traditional assets, with capital flows into BTC accelerating sharply," wrote Hina Sattar Joshi, director at TP ICAP – Digital Assets. "This week saw another surge in demand for bitcoin ETFs (exchange traded funds), reinforcing the broader trend." Currency bid prices at 22 May 02:53 p.m. GMT Descripti RIC Last U.S. Pct YTD Pct High Low on Close Change Bid Bid Previous Session Dollar 99.924 99.594 0.34 per cent -7.90 per cent 99.946 99.4 index 38 Euro/Doll 1.1277 1.133 -0.46 per cent 8.93 per cent $1.1345 $1.1 ar 275 Dollar/Ye 143.76 143.68 0.06 per cent -8.63 per cent 144.165 142. n 815 Euro/Yen 162.12 162.75 -0.39 per cent -0.67 per cent 163.37 161. 82 Dollar/Sw 0.8286 0.8252 0.4 per cent -8.71 per cent 0.829 0.82 iss 35 Sterling/ 1.3418 1.342 0 per cent 7.29 per cent $1.344 $1.3 Dollar 392 Dollar/Ca 1.3875 1.3861 0.1 per cent -3.52 per cent 1.3889 1.38 nadian 48 Aussie/Do 0.6414 0.6438 -0.35 per cent 3.68 per cent $0.6459 $0.6 llar 411 Euro/Swis 0.9344 0.9348 -0.04 per cent -0.52 per cent 0.9353 0.93 s 31 Euro/Ster 0.8402 0.8441 -0.45 per cent 1.57 per cent 0.8449 0.84 ling 03 NZ 0.5903 0.5939 -0.58 per cent 5.52 per cent $0.5941 0.58 Dollar/Do 95 llar Dollar/No 10.2055 10.1188 0.86 per cent -10.21 per cent 10.2185 10.1 rway 539 Euro/Norw 11.5088 11.524 -0.17 per cent -2.24 per cent 11.54 11.4 ay 989 Dollar/Sw 9.6257 9.5632 0.65 per cent -12.63 per cent 9.6403 9.55 eden 8 Euro/Swed 10.8591 10.8406 0.17 per cent -5.3 per cent 10.8797 10.8 en 3
CNA
05-05-2025
- Business
- CNA
Dollar weakens against major currencies as markets weigh tariff uncertainty
NEW YORK :The U.S. dollar was mostly lower against major currencies, including the yen and the euro, on Monday as markets weighed continued uncertainty from President Donald Trump's policies and their impact on the economy. The greenback slid to a fresh record low against the Taiwan dollar to 28.8150 amid speculation that Taiwan was letting its currency appreciate as part of a trade deal with the U.S., or at least was unwilling to intervene to stop it rising alongside sharp inflows in capital. Trump doubled down on tariff-driven policies during an interview on Sunday, reiterating that the duties on U.S. imports would eventually make Americans rich. He announced on Sunday a new 100 per cent tariff on films made outside the U.S. Markets have been affected by the fact that Trump is not leaving his stance that tariffs are important, said Juan Perez, director of trading at Monex USA in Washington. The dollar was down 0.79 per cent against the Japanese yen at 143.805. Against the Swiss franc, the dollar weakened 0.57 per cent to 0.822. Trump said he would not attempt to remove Federal Reserve Chair Jerome Powell, but repeated calls for lower interest rates and called Powell a "stiff". The Fed meets on Wednesday and is widely expected to leave rates steady following a solid March payrolls report. Perez said the U.S. dollar was being hurt the most by chaos in the markets. "I think we're returning today very sour mood and descent and this idea that overall you may not necessarily rely on American markets the way you used to. And that's been seen across Treasuries." Markets now imply only a 37 per cent chance of a Fed rate cut in June, down from 64 per cent a month ago. Goldman Sachs and Barclays both shifted their cut calls to July from June. The dollar trimmed its losses briefly against the yen after the Institute for Supply Management report for April showed a larger-than-expected pickup in growth in the U.S. services sector, which accounts for two-thirds of the American economy. Chinese onshore markets were closed but the yuan traded offshore hit its highest in almost six months at 7.1831 per dollar as investors wagered Beijing might let its currency strengthen as part of trade talks with Washington. The yuan was last up 0.23 per cent to 7.194 per dollar. In Europe, the euro was up 0.27 per cent at $1.133025 and the pound was up 0.28 per cent at $1.33050. The Bank of England will meet on Thursday and is widely expected to cut rates by a further 25 basis points to 4.25 per cent. Central banks in Norway and Sweden also meet this week and are expected to keep rates steady.
Yahoo
26-03-2025
- Business
- Yahoo
Dollar dips as traders stay cautious on impending tariffs
By Karen Brettell NEW YORK (Reuters) - The dollar weakened against the yen and was steady against the euro on Tuesday as uncertainty around President Donald Trump's planned tariffs kept traders cautious, following a rally in the U.S. currency a day earlier on optimism that he would be flexible in applying the import levies. "The world's trading a little bit more risk-off today (Tuesday) after a risk-forward day yesterday (Monday)," said Helen Given, FX trader at Monex USA, noting that Monday's move "wasn't really based on very much except for headlines." Trump said on Monday that not all of his threatened levies would be imposed on April 2 and some countries might get breaks. The dollar has weakened on fears that tariffs will slow the U.S. economy and also reignite inflation. Rising optimism that the tariffs won't be as bad as feared, however, has helped the greenback stabilize in the past few weeks. A stronger-than-expected services component in S&P Global's flash U.S. PMI figures on Monday helped to offset concerns that the U.S. economy is facing a near-term contraction. But data on Tuesday showed that U.S. consumer confidence dropped for a fourth straight month in March, with households the most pessimistic about the future in 12 years. "Households were expecting President Trump to lead with tax cuts and deregulation, but instead we have austerity and the prospect of significant trade tariffs. This is prompting anxiety about household finances and job prospects with the concern being this translates into weaker spending," James Knightley, chief international economist, US at ING said in a note. The dollar fell 0.58% to 149.81 Japanese yen after earlier reaching a three-week high of 150.94. The move in the interest rate sensitive currency pair came as U.S. Treasury yields were lower on the day. Bank of Japan policymakers discussed the pace of raising interest rates further after deciding to hike short-term interest rates to the highest in 17 years, minutes of their January meeting showed on Tuesday. Last week, the BOJ kept interest rates steady and warned of heightening global economic uncertainty, suggesting the timing of further rate hikes will depend largely on the fallout from U.S. tariffs. The euro was little changed following a choppy trading session. The single currency was earlier boosted by a survey showing that German business morale rose in March as companies expect a recovery after two years of contraction in Europe's largest economy. French central bank chief Francois Villeroy de Galhau, meanwhile, told a German newspaper that there is still room to lower European Central Bank interest rates further, and the 2.5% deposit rate could fall to 2% by the end of the summer. The euro was last down 0.02% at $1.0798. It earlier reached $1.0774, the lowest level since March 6. The U.S. currency will likely be boosted by month-end and quarter-end rebalancing later this week and on Monday. "The biggest flow dynamic that we see right now is a little bit of a turnaround from the decidedly USD-negative first quarter that we saw as people start to pare off those positions into month-end and quarter-end," Given said. Commodity Futures Trading Commission data on Friday showed speculators turned net bearish on the U.S. currency last week for the first time since October. The Australian dollar climbed after the country's government launched fresh tax cuts on Tuesday and announced other cost-of-living relief in a major push to win back disgruntled voters. It was last up 0.19% at $0.6296. Sterling rose 0.19% to $1.2943 as traders looked toward the release of the spring statement on Wednesday in which British finance minister Rachel Reeves is expected to cut government spending to meet fiscal rules. British retailers reported the sharpest drop in sales volumes in eight months in March and they expect to see little improvement next month, an industry survey showed on Tuesday. Traders are also watching talks over a possible peace deal between Russia and Ukraine. The United States reached deals on Tuesday with Ukraine and Russia on a truce in the Black Sea and a pause in attacks on energy facilities, with Washington also pledging to push for the lifting of some financial sanctions against Moscow. Bitcoin fell 0.18% to $87,737. It reached $88,772 on Monday, its highest price since March 7. Sign in to access your portfolio
