Latest news with #U.S.Dollar
Yahoo
4 days ago
- Business
- Yahoo
AAVE Rebounds From 15% Drop as DeFi Yield Markets Gain Momentum
AAVE has demonstrated remarkable resilience in the face of global market turbulence, rebounding from a 15% price drop over four days as buyers stepped in to capitalize on DeFi's growing momentum. The protocol's price climbed from $240 to above $250, buoyed by expanding tokenized yield markets that are drawing increased institutional and retail interest. The price action comes as global trade tensions and new tariff uncertainties — including reports of China violating its trade agreement with the U.S. — injected volatility across risk assets. Despite these headwinds, the DeFi sector is showing renewed strength, with total value locked (TVL) surging to $178.52 billion. AAVE remains a key leader in the space, commanding a TVL of $25.41 billion. News Background A key driver of AAVE's recent rebound has been its integration with Pendle's tokenized yield markets, which saw new markets reach their supply caps within hours of launch, underscoring the strong demand for yield-generating products in the DeFi ecosystem. The Ethereum Foundation (EF) borrowed $2 million in GHO, Aave's decentralized stablecoin pegged to the U.S. Dollar, earlier this week. This move, facilitated by supplying ETH as collateral, highlighted EF's strategy of leveraging its crypto holdings to fund operations while supporting Aave's protocol. Aave's GHO stablecoin is fully overcollateralized within the Aave ecosystem, with EF's loan backed by 1,403,519.94 Gwei of ETH (valued at $0.01 in the transaction). Interest payments on this loan support Aave's DAO treasury, reinforcing a community-driven financial model that incentivizes participation and governance. Aave's lending dominance is underscored by its 45% market share from January 2023 to May 2025, according to IntoTheBlock data. This figure highlights Aave's steady recovery from the 2023 DeFi dip and cements its status as the largest decentralized lending protocol by volume and activity. Technical Analysis Recap AAVE established a high-volume support zone around $242.70 during the 16:00-17:00 and 01:00-02:00 hours, attracting strong buying with volumes exceeding 90,000 units. A bullish ascending triangle pattern formed, with higher lows indicating accumulation despite recent resistance. After peaking at $255.96 at 20:00, AAVE set resistance at $253.75 before stabilizing at $248-$250. A notable volume spike between 07:51-07:52 coincided with a sharp rise from $248.98 to $249.82, creating a new resistance level. A cup-and-handle pattern formed, with the handle developing between 07:56-08:00, suggesting accumulation after the recent pullback. Short-term consolidation near $249, coupled with increasing volume on upward moves, hints at potential bullish momentum building for a test of $250 resistance. As DeFi yield markets continue to expand, AAVE's ability to integrate new products and sustain high-volume support levels positions it as a key player in the sector's growth — despite the broader market's macroeconomic challenges. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
20-05-2025
- Business
- CNBC
U.S. Treasury yields slip as Fed signals just one rate cut in 2025
U.S. Treasury yields slipped early Tuesday after the U.S. Federal Reserve signaled just one rate cut in 2025. The 30-year Treasury yield slipped almost 3 basis points after briefly surging past 5% on Monday. The 10-year yield dipped 2 basis points to 4.455% at 1:50 a.m. ET, and the 2-year Treasury yield shed slightly over 1 basis point to 3.97%. One basis point is equivalent to 0.01%, and yields and prices move in opposite directions. Last Friday, Moody's Ratings lowered the U.S. credit rating to the second-highest tier, following in the footsteps of S&P Global Ratings and Fitch, which did so in 2011 and 2023, respectively. The downgrade from Aaa to Aa1 by Moody's is "admittedly significantly dire," said Vishnu Varathan, head of macro research at Mizuho Securities. But the move is "inconsequential" for markets, he wrote in a note. Though the resultant jolt in yields may clip already tentative market optimism, the downgrade is unlikely to crush the broader recovery, he added. The downgrade has no adverse impact on the liquidity and collateral value of U.S. Treasurys, and hence no "imminent shock" from forced liquidation, Varathan said. "Above all, there are no triple-A alternatives for markets that are sufficiently deep and liquid to threaten the reserve asset status of USTs that is tagged to the U.S. Dollar's global reserve currency status," he added. In April, U.S. Treasury yields surged after U.S. President Donald Trump introduced broad "reciprocal tariffs" targeting foreign trade partners. Concerns over a potential financial panic and higher consumer borrowing costs led the administration to scale back the most aggressive tariffs. On top of that, Atlanta Federal Reserve President Raphael Bostic told CNBC on Monday he's leaning toward just one interest rate cut this year, as the central bank seeks to strike a balance between containing inflation risks and avoiding an economic downturn. Although the Fed's March projections indicated two 25-basis-point cuts in 2025, Bostic noted that the impact of tariffs has been more significant than anticipated.
Reuters
12-05-2025
- Business
- Reuters
Breakingviews - Taiwan insurers get a stern currency warning
HONG KONG, May 12 (Reuters Breakingviews) - The Taiwanese currency's recent stunning rally against the U.S. dollar has highlighted a big risk in an unlikely area: the island's insurers. The large swing against the greenback, if sustained, will hit earnings at Cathay Life and its peers, which between them hold some $760 billion of overseas investments, mostly of U.S. stock and bonds. Hedges and reserves will soften the blow. But the underlying mismatch of domestic policies funding overseas assets is an enduring problem. It is hard to pinpoint what prompted the Taiwan dollar's overall 6% appreciation, per LSEG, against its U.S. counterpart on May 2 and May 5. A combination of capital inflows and expectations that authorities will allow a stronger currency to smooth trade talks with Washington were probably factors, although the central bank has denied the latter. In any event, local exporters rushing to convert U.S. dollars and investors scrambling to hedge their currency exposure exacerbated the situation. As of Friday's close, the Taiwan dollar was trading at 30.29 to the dollar - a near-9% appreciation since the start of April. The island's insurers have put an estimated 70% of their $1 trillion, opens new tab or so of investable assets as of January overseas, but 80% of their liabilities – the life insurance policies they have written – are in the local currency. When they prepare their earnings results each quarter, they have to convert their foreign holdings into Taiwanese dollars. On paper, the recent ructions mean – absent a reversal – that their bottom lines are in for a pummelling. Cathay Life disclosed, opens new tab last year that a 1% of currency appreciation against the U.S. dollar would translate to a T$7.6 billion ($251 million) hit to its bottom line, after hedging. Theoretically, a 10% appreciation would have wiped out its full-year profit. The island's central bank supports local life insurers by funding a "decent chunk" of their hedging costs via FX swaps managed by local banks, according to Brad Setser, a Senior Fellow at the Council on Foreign Relations. That still leaves a significant portion of private market hedges exposed to global interest rates and price swings. All else being equal, a strengthening Taiwan dollar can quickly turn into a solvency nightmare: the local industry has a combined $86 billion in shareholders' equity, representing 11.3% of its overseas holding. Taiwanese lifers, though, have spent years managing currency fluctuations while remaining well capitalised. They have specific reserve funds that can offset up to 100% of foreign exchange losses; those reserves swelled on the back of a strong U.S dollar in 2024. They have also ramped up sales of foreign-denominated policies in recent years. All in, that means just 12% of total assets have none of those protections, per S&P Global analyst Serene Hsieh. That works out to $147 billion, using the latest government figures as of January - less than 18% of GDP. That's comforting from a systemic perspective. But it's no excuse for complacency. Income statements will still bleed red ink. And U.S. President Donald Trump's trade wars may yet cause further ructions that lead to long-term appreciation of the Taiwan dollar. Ultimately, so long as the export-dependent economy keeps running a massive account surplus - nearly 15% of GDP last year - life insurers will keep investing abroad. But now their balance sheet mismatch has been exposed, they will need to find new ways to mitigate it. Follow @mak_robyn, opens new tab on X CONTEXT NEWS Taiwan's Financial Supervisory Commission held meetings with three of the island's biggest insurers, Cathay Life, Fubon Life and Nanshan Life, local media reported on May 5. The three companies told the regulator that their risk-based capital ratios would remain within legal limits even if the Taiwan dollar strengthened below 30 per U.S. dollar, according to the report. The Taiwan dollar's 6% rise against the U.S. dollar over May 2 and May 5 marked a record two-day appreciation. On May 9, the currency closed at 30.29 to the U.S. dollar, per LSEG.
The Hindu
30-04-2025
- Business
- The Hindu
FIIs turn net buyers of Indian stocks, first time in 4 months
Foreign institutional investors (FII) turned net buyers for the first time in four months, investing ₹4,223 crore in Indian stocks in April 2025. FIIs were net sellers in seven months in fiscal 2025, and the outflows increased significantly after October 2024, when the foreign investors sold equity worth almost ₹1 lakh crore. The data comes amid volatility in global markets after U.S. President Donald Trump's tariff announcement. Foreign funds bought debt securities and sold equities in March 2025 and this trend reversed in April. The increase in foreign inflows in equities assumes significance following the 90-day pause on U.S. tariffs until July 9. U.S. Treasury Secretary Scott Bessent had said recently that India may be among the first few nations to seal a trade deal with the U.S. The optimism of foreign funds was 'mainly because of the dollar index, which was around some 105, 104 levels, going down to 100 or 99, and our currency also relatively did much better,' said Shrikanth Chouhan, head of research at Kotak Securities. A large section of these foreign investment inflows were into banking, financial services and insurance because of the RBI's accommodative stance and reducing exposure to IT in fear of U.S. recession hitting their earnings. Rupee's best gain Meanwhile, the rupee on Wednesday witnessed its most significant single-day appreciation since November 2022 by gaining 42 paisa against the U.S. dollar. 'This surge can be attributed to month-end adjustments and a technical sell-off in the U.S. dollar leading up to the holiday. Despite prevailing geopolitical tensions, trader caution was somewhat offset by the Reserve Bank of India's apparent absence from the market and the strengthening of other Asian currencies, providing support to the rupee,' said Dilip Parmar – Senior Research Analyst, HDFC Securities. 'Looking ahead in the near term, the spot U.S. Dollar/Indian Rupee pair finds support around the 84.10 level and faces resistance near 85.50. The current bias appears to favour further strengthening of the rupee,' he added..
Malay Mail
29-04-2025
- Business
- Malay Mail
Octa Broker Analysis: Why the U.S. Dollar is Struggling Amid Global Trade Turmoil
KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 29 April 2025 – The U.S. Dollar, the world's reserve currency and the ultimate safe-haven asset, is now the world's worst-performing major currency in 2025. Octa Broker explains why. The historical role of the U.S. dollar as the world's leading safe-haven currency is under threat. Despite rising macroeconomic uncertainty, investors are fleeing the U.S. dollar, defying conventional safe-haven flows. Greenback's rapid depreciation over the past weeks has fuelled speculation over the loss of confidence in its safe-haven status. With USDCHF trading news multi-year low, Octa Broker analyzes if we are in the midst of dramatic regime change in markets and explains why the U.S. dollar is struggling amid global trade U.S. dollar (USD),or, as it is often informally referred to, has long occupied a rather exclusive position in global finance. Ever since the end of World War II and the establishment of the Bretton Woods monetary system, the greenback has played a crucial role in facilitating cross-border transactions and smoothing international trade flows, in addition to serving as a primary reserve currency for central banks around the world. Being the official currency of the world's largest economy, the United States, has certainly helped the dollar maintain its dominant position. Indeed, the sheer size of the U.S. economy, its deep and liquid financial markets, strong private property rights and the rule of law enshrined in the U.S. Constitution, and last but not least, the unrivalled power of the U.S. military, made the dollar the most trusted global currency. As a result, the greenback became what market participants call 'a safe-haven currency', a refuge for investors during times of macroeconomic uncertainty or market turmoil. Most recently, however, the instability in global financial markets triggered by rising trade tariffs and exacerbated by fears of a global recession seems to have upended this narrative, undermining the dollar's established U.S. dollar has been depreciating almost relentlessly since mid-January. In just three and a half months, the Dollar Index (DXY), which measures the value of the greenback relative to a basket of six major foreign currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, lost more than 10% in value (from 13 January high to 21 April low). On 11 April, it breached the critical 100.00 level, and although it has since increased slightly, it remains by far the worst-performing currency among other major currencies this year so far. This decline has raised an important question: Is the U.S. dollar losing its safe-haven status, or is it merely a temporary catalyst for the dollar's slide is rooted in the escalating trade tensions, particularly the aggressive tariff policies enacted by U.S. President Donald Trump. In recent weeks, the U.S. imposed a 10% baseline tariff on all imports, with much steeper duties imposed on key trading partners like China, which, in turn, retaliated with its own 125% levies on U.S. goods. These moves have stoked fears of a global recession, as international supply chains may get disrupted with potentially devastating consequences for the world economy. Historically, such uncertainty would bolster the dollar, as investors seek the safety of U.S. assets. However, this time around, the greenback is faltering, while alternative safe-haven currencies like the Swiss franc (CHF) and Japanese yen (JPY) are gaining Yong Ang, a financial market analyst at Octa Broker, says that the U.S. dollar's recent weakness is driven by a diversification shift among investors into alternative safe-haven currencies, motivated by risk-hedging and fears over the growth prospects of the U.S. on April 21, USDCHF dropped below the 0.80500 mark, the level unseen in almost 14 years, while USDJPY was hovering near the critical 140.00 area, a drop below which will open the way towards new multi-year lows. Significant shifts in capital flow allocations have prompted some analysts to conclude that the U.S. dollar is facing a crisis of confidence. However, Octa analysts have a different view and believe that the current situation doesn't reflect a broad erosion of investors' long-term trust in the U.S. dollar. Kar Yong Ang said: 'The issue isn't so much a fundamental loss of faith in the U.S. dollar's long-term prospects. What we are witnessing right now is a dramatic, yet logical response to the probable economic implications of Donald Trump's trade policies. You have an administration, which is effectively re-structuring the global trade order, that does not conceal its dissatisfaction with the Fed and apparently believes in a weak dollar. If you're a foreign investor in the U.S., you simply cannot afford to be unhedged these days. But also, let's not forget that the greenback has been falling from relatively high levels, so a healthy downward correction was long overdue'. In other words, the recent slide in the U.S. dollar is not an unusual phenomenon or an anomaly; it is quite natural and probably a short-term occurrence. In fact, even after an 11% drop in 2025, the greenback is still some 38% above its historical low set in 2008. Furthermore, it is clear that once key global actors adopt more conciliatory diplomatic rhetoric and engage in active trade negotiations, the situation will normalise for the dollar's long-term prospects, its dominant status will likely continue to be challenged, but no single currency can take its crown for now. According to the Bank of International Settlements (BIS), the U.S. dollar still accounts for nearly 88% of international transactions, and its dominance in Forex markets remains unmatched, with daily trading volumes dwarfing those of the yen or franc. According to the International Monetary Fund (IMF), more than half (57.8%) of the $12.4 trillion in global foreign exchange reserves were in U.S. dollars. Therefore, while the greenback may not be the automatic refuge it once was, its role as a Forex cornerstone endures for now.___Hashtag: #octa The issuer is solely responsible for the content of this announcement. Octa Octa is an international CFD broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools. The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities. In Southeast Asia, Octa received the 'Best Trading Platform Malaysia 2024' and the 'Most Reliable Broker Asia 2023' awards from Brands and Business Magazine and International Global Forex Awards, respectively
