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Sky News
5 days ago
- Business
- Sky News
Trade war: What a weakening dollar means for Trump
The weakening of the US dollar has arguably been the story of the year for financial markets. The mighty greenback is the world's reserve currency by virtue of the fact that so many nations and investors hold it. But it has taken a mighty tumble under the Donald Trump 2.0 presidency - to the point this week that the dollar index, which measures it against six other major currencies, is down 9% this year and on course for its worst annual performance since 2017. It is no coincidence that that decline also took place under a Trump-controlled White House. The reasons for it are similar but against a far weaker domestic and global economic backdrop than seen last time round. Why is the dollar falling? It all forms part of the wider investor turmoil over the president's trade war, its implications for the US economy and, crucially, the impact of his agenda on the public finances. The main cause for concern recently had been the potential for recession in the world's largest economy due to trade war import duties - tariffs - stoking inflation. The fallout has damaged the potential for interest rate cuts by the US central bank - a scenario that would normally be supportive of a currency. But attention has increasingly turned towards the US budget deficit and total debt pile, given Mr Trump's controversial tax cut and spending hike plans. Independent figures suggest they will add about $2.4trn to the $36.2trn total for US government debt - a debt pile that has become more expensive to service. 1:00 It's fair to say weaker stock markets, bond sell-offs and a weaker dollar are not the reactions the president wants to see at the start of his second term. For all the headline-seeking slogans of "America First" and "Make America Great Again", the on-off trade war designed to restore US manufacturing might and jobs is taking a toll. It explains the tax cut push but the president cannot escape the fact that federal, corporate and personal finances - such as investments and pension values - have taken a hit. Despite that, YouGov poll data this week showed that for the first time in two months, less than half of US adult citizens strongly or somewhat disapproved of how he was handling the job. What does it all mean for Americans? If you strip out the short-term hits to pensions and asset values, a weaker dollar will offset some of additional tariff-related costs paid by importers to the US, as a dollar will go further when buying goods in a currency that has strengthened. In theory, it will help limit the impact of any rising costs paid by consumers once goods have made their way down the supply chain. Conversely, Americans heading abroad will find their buck doesn't get them as much. How about for us Brits? 5:08 We have not been immune from the market turmoil - with pension and fund holdings (especially those containing US interests) taking a knock. The weaker dollar is bad news for UK-based firms booking dollar earnings back home as they won't go as far when recorded in pounds. But a weaker dollar means a pound will go further if you're travelling to the US. Sterling is more than 8% up versus the dollar in the year to date and the spot rate currently stands at $1.3566 - around levels last seen in 2022. Travel money sites suggested that UK tourists heading stateside would get a conversion around the $1.3230 level. What about the outlook? 9:28 Much will depend on how the Trump trade war plays out in the months ahead. These values say more about the dollar weakness than pound strength because the UK has many similar challenges to the US - sticky inflation, worries about the sustainability of government debt and weak growth. The currency shift MAY help to further reduce UK inflationary pressure. It is hoped, for example, that the weakening dollar will continue to help drive down oil costs. Brent crude - priced in dollars, crucially, - struck a four-year low in April and a barrel is currently $1 above that level at $64.
Sky News
09-05-2025
- Business
- Sky News
Trade war: Trump floats China tariff cut to 80% ahead of talks
Donald Trump has floated the idea of cutting US trade tariffs against China to 80%, as key peace talks between the sides prepare to get underway. The meeting, involving top officials from both nations in Switzerland, is seen as an opportunity to ease the most damaging element of the trade war in terms of the global economic outlook. Writing on his Truth Social platform, hours after agreeing to an interim deal with the UK, the president said: "80% Tariff on China seems right! Up to Scott B [Besset]." It means that the decision will lie with Scott Bessent - the US treasury secretary who will lead the US delegation at the talks in Geneva. The outcome is eagerly awaited after several rounds of tariff hikes that currently amount to duties of 125% against US imports to China and 145% for Chinese goods arriving in America. Both levels amount to an effective trade embargo, given the severity of those numbers. The announcement of talks in Switzerland this week has been witnessed across financial markets, with global stock markets rising in anticipation of a cooling in the trade hostilities between the world's two largest economies. Investors are not only concerned by higher, if not extortionate, prices but also the impact on supply. The effects are being felt in both economies already. Fears of a trade war effectively meant that the US economy contracted during the first three months of the year, while the US central bank has held off on interest rate cuts on the grounds that tariffs applied to imports by the Trump administration globally will lift inflation markedly. Official data out of China is yet to show any obvious pain, but surveys suggest factory orders tumbling. The fact that China is suffering was borne out on Wednesday when the country's central bank cut interest rates and reduced bank reserve requirements to help free up more funding for lending. The authorities also agreed wider borrowing facilities to help manufacturers. It will be hoped that bolstering activity in the economy will help lift prices generally as China continues to battle deflation. Officially, China has signalled that it wants the US to make the first concession. Its delegation in Geneva is led by vice premier He Lifeng - a figure within China who has gained an international reputation as an effective negotiator.
The Print
05-05-2025
- Business
- The Print
Indian stocks carry forward last week's momentum; Sensex up nearly 300 points
Sensex closed at 80,796.84 points, up 294.85 points or 0.37 per cent, Nifty closed at 24,461.15 points, up 114.45 points or 0.47 per cent. Most of the sectoral indices were in the green, with Nifty auto and oil and gas rising the most on Monday. New Delhi [India], May 5 (ANI): Indian stock indices extended their gains from the previous week, starting the fresh week on a positive note. As the week progresses, Indian stock markets will closely monitor the movement of foreign portfolio investments (FPI), which have recently turned net buyers, along with developments on the India-US bilateral trade deal front, and the Q4 earnings of key listed companies for fresh cues. Globally, the outcome of the US Central Bank monetary policy meeting would also be closely watched. Last week, the Sensex and Nifty indices registered their longest weekly winning streak of 2025. Cumulatively, Sensex soared over 1,100 points or 1.5 per cent in the holiday-truncated week. The stock exchanges were closed on May 1 for Maharashtra Day. Another positive factor was that foreign portfolio investors turned net buyers in Indian markets after three months, though the pace of buying is still picking up. 'The market has sustained its positive momentum, though the level of optimism has decreased. Continued foreign inflows and record GST collections in April indicate resilience in economic activity, fostering mild hopefulness,' said Vinod Nair, Head of Research, Geojit Investments Limited. 'A weak dollar and a decline in oil prices have further bolstered FII sentiment. However, the market's momentum is moderating, with action shifting from broad-based movements to stock and sector-specific trends based on results. Over the past month, the broad market has recouped more than 50 per cent of the losses incurred during the consolidation period from September 2024 to March 2025,' Nair added. Sundar Kewat, Technical and Derivatives Analyst, Ashika Institutional Equity, said gains were capped as investor sentiment turned cautious amid escalating geopolitical tensions between India and Pakistan, prompting a defensive stance despite support from select sectors. Indian stock indices had seen upward movement since Trump's decision to pause the reciprocal tariffs on dozens of countries, including India, for 90 days. The tariffs had initially set off a sell-off in equities globally, and India was no exception. Geopolitical tensions, including the tension between India and Pakistan following terrorist attack in Pahalgam on April 22, had weighed on investor sentiment to an extent recently. The investors will keep an eye on the developments. (ANI) This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content.
The Print
04-05-2025
- Business
- The Print
India stock outlook: FPI trends, Fed policy, and Pakistan tensions to guide markets sentiment
Globally, the outcome of the US Central Bank monetary policy meeting would also be closely watched. New Delhi [India], May 4 (ANI): Indian stock markets will closely monitor the movement of foreign portfolio investments (FPI), which have recently turned net buyers, along with developments on the India-US bilateral trade deal front, and the Q4 earnings of key listed companies for fresh cues in the coming week. This week, the Sensex and Nifty indices registered their longest weekly winning streak of 2025, led by steady foreign inflows and increasing optimism over a potential India-US trade deal. Cumulatively, Sensex soared over 1,100 points or 1.5 per cent in the holiday-truncated week. The stock exchanges were closed on May 1 for Maharashtra Day. Reliance Industries' strong Q4 performance and its becoming the first Indian company to cross Rs 10 lakh crore in total equity also supported the broader stock market indices. Reliance shares jumped about 7 per cent on a cumulative basis in the week that ended on Friday. Another positive factor was that foreign portfolio investors turned net buyers in Indian markets after three months, though the pace of buying is still picking up. 'The week is expected to be pivotal for global financial markets, with high-impact economic events from the United States and China. In the US, all eyes will be on the FOMC Rate Decision scheduled for May 7, as markets closely monitor any changes in the Federal Reserve's interest rate policy amid ongoing inflationary pressures and mixed economic signals,' said Bajaj Broking Research in a note. 'China will release a batch of critical data, beginning with Trade Balance, Exports YoY, and Imports YoY on May 9, which will offer valuable insight into global demand trends and the state of international trade. The week will wrap up with China's CPI and PPI data on May 10, providing a comprehensive view of inflation at both consumer and producer levels. Together, these indicators will offer a clearer picture of global economic momentum and could significantly sway investor sentiment and central bank strategies,' the note added. Indian stock indices had seen upward movement since Trump's decision to pause the reciprocal tariffs on dozens of countries, including India, for 90 days. The tariffs had initially set off a sell-off in equities globally, and India was no exception. Emanating geopolitical tensions, following the terrorist attack in Pahalgam, had weighed on investor sentiment to an extent recently. Developments regarding geopolitical tensions with Pakistan following the April 22 terrorist attack will remain on the investors' radar. (ANI) This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content.
Times of Oman
04-05-2025
- Business
- Times of Oman
India stock outlook: FPI trends, Fed policy, and Pakistan tensions to guide markets sentiment
New Delhi: Indian stock markets will closely monitor the movement of foreign portfolio investments (FPI), which have recently turned net buyers, along with developments on the India-US bilateral trade deal front, and the Q4 earnings of key listed companies for fresh cues in the coming week. Globally, the outcome of the US Central Bank monetary policy meeting would also be closely watched. This week, the Sensex and Nifty indices registered their longest weekly winning streak of 2025, led by steady foreign inflows and increasing optimism over a potential India-US trade deal. Cumulatively, Sensex soared over 1,100 points or 1.5 per cent in the holiday-truncated week. The stock exchanges were closed on May 1 for Maharashtra Day. Reliance Industries' strong Q4 performance and its becoming the first Indian company to cross Rs 10 lakh crore in total equity also supported the broader stock market indices. Reliance shares jumped about 7 per cent on a cumulative basis in the week that ended on Friday. Another positive factor was that foreign portfolio investors turned net buyers in Indian markets after three months, though the pace of buying is still picking up. "The week is expected to be pivotal for global financial markets, with high-impact economic events from the United States and China. In the US, all eyes will be on the FOMC Rate Decision scheduled for May 7, as markets closely monitor any changes in the Federal Reserve's interest rate policy amid ongoing inflationary pressures and mixed economic signals," said Bajaj Broking Research in a note. "China will release a batch of critical data, beginning with Trade Balance, Exports YoY, and Imports YoY on May 9, which will offer valuable insight into global demand trends and the state of international trade. The week will wrap up with China's CPI and PPI data on May 10, providing a comprehensive view of inflation at both consumer and producer levels. Together, these indicators will offer a clearer picture of global economic momentum and could significantly sway investor sentiment and central bank strategies," the note added. Indian stock indices had seen upward movement since Trump's decision to pause the reciprocal tariffs on dozens of countries, including India, for 90 days. The tariffs had initially set off a sell-off in equities globally, and India was no exception. Emanating geopolitical tensions, following the terrorist attack in Pahalgam, had weighed on investor sentiment to an extent recently. Developments regarding geopolitical tensions with Pakistan following the April 22 terrorist attack will remain on the investors' radar.
