Latest news with #VolkmarBaur
Reuters
3 days ago
- Business
- Reuters
South African rand gains after foreign reserves data
JOHANNESBURG, June 6 (Reuters) - The South African rand edged up in early trade on Friday, after central bank data showed that foreign reserves increased last month. At 0742 GMT the rand traded at 17.7650 against the dollar , about 0.2% firmer than Thursday's closing level and hovering around its highest level since December 2024. South Africa's net foreign reserves rose to $64.804 billion at the end of May from $64.318 billion in April, the country's central bank reported on Friday. Commerzbank analyst Volkmar Baur said in a research note the local currency has also benefited from renewed U.S. dollar weakness in recent weeks. The dollar was up 0.2% against a basket of currencies but has been under pressure due to signs of fragility in the U.S. economy and as trade negotiations between Washington and its trading partners made little progress despite a looming deadline. The note added that news of an agreement in South Africa's long-delayed budget also provided support for the rand. On Wednesday, a key parliamentary committee backed the national budget's fiscal framework and revenue proposals, clearing the path for a vote in the lower house of parliament on June 11. South Africa's benchmark 2035 government bond was slightly weaker in early deals, as the yield rose 2 basis points to 10.07%.
Business Recorder
14-05-2025
- Business
- Business Recorder
China's yuan falls from six-month peak on rising dollar demand
SHANGHAI: China's yuan fell from a six-month peak against its US counterpart on Wednesday, pressured by rising demand for the dollar from corporates and offshore buyers after the greenback's recent dip. The Chinese currency leapt to levels last seen in November in both onshore and offshore markets on Tuesday, breaching the psychologically important 7.2 per dollar level, as Beijing and Washington's agreement to pause their trade war boosted sentiment. The deal inked between the US and China after weekend talks in Geneva surpassed market expectations, as both sides agreed to drastically unwind most of the tariffs imposed on each other's goods since early April. The sudden strength prompted major state-owned banks to buy dollars and sell yuan in the onshore spot market to slow the pace of yuan rallies on Tuesday, sources told Reuters. Those moves were followed by more dollar demand on Wednesday including buying interests from corporate clients and overseas listed Chinese companies for their dividend payments. As of 0313 GMT, the onshore yuan was 0.18% lower at 7.2169 per dollar. It hit a six-month high of 7.1855 on Tuesday. Its offshore counterpart was down about 0.22% in Asian trade at 7.2133 as of 0313 GMT. Volkmar Baur, FX analyst at Commerzbank, said China still faced risks from deflationary pressures and that the impact from the Sino-US trade deal was likely to be only marginal. 'Further interest rate cuts by the central bank are perhaps not to be expected in the short term,' Baur said. China's yuan strengthens 'Structurally, however, the direction is likely to be clear. Even though the yuan has enjoyed political tailwinds for a few days and USD/CNY is back below 7.20 for now, the yuan is more likely to weaken in the medium term.' China delivered sweeping monetary easing measures last week, including interest rate cuts and a major liquidity injection. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1956 per dollar, the strongest since April 3. The setting was 143 pips weaker than a Reuters' estimate of 7.1813, the first time since November the fixing was below market expectations. Traders interpreted that as a sign that authorities may not want a too-strong yuan when the dollar is largely steady in overseas markets. 'With a more dovish-than-expected result to last weekend's US-China trade negotiations, and relatively limited signs of a broader surge in protectionism beyond the US, we are increasing our forecasts for China's export growth for the second time in a week,' Goldman Sachs analysts said in a note. 'We expect policymakers to allow gradual appreciation of the yuan against the dollar in an environment of broad dollar weakness.' They revised yuan forecasts to hit 7.20, 7.10 and 7.00 on a three-, six- and 12-month horizon, compared with 7.30, 7.35 and 7.35, respectively, in a previous prediction.
Zawya
09-05-2025
- Business
- Zawya
Dollar gets a weekly boost ahead of US-China trade talks
SINGAPORE/LONDON: The dollar headed for a weekly gain on most major currencies on Friday, after a U.S.-UK trade deal fuelled investor optimism over upcoming U.S.-China talks, while bets of imminent Fed rate cuts receded after the central bank indicated it was in no hurry. Financial markets are heading into the weekend with the focus squarely on trade negotiations between Washington and Beijing due to begin on Saturday in Switzerland. The euro touched a one-month low of $1.1197 overnight was down about 0.6% for the week. It was last up 0.2% on the day at $1.2253. The yen, a good gauge of investor confidence, has weakened about 0.4% this week and hit a one-month trough of 146.18 per dollar, before strengthening to 145.195, leaving the dollar down 0.5% on the day. Sterling, which had rallied on news reports of an impending U.S.-UK trade deal, gave back gains when the agreement turned out to be pretty limited and struck a three-week low of $1.3220 in early trade on Friday. The "general terms" agreement modestly expands agricultural access for both countries and lowers prohibitive U.S. duties on British car exports, but leaves in place the 10% baseline. "Overall, I find it hard to fathom why the U.S. dollar reacted positively in yesterday's trading. The deal (or better call it non-deal) is not very substantial and does not necessarily give rise to hopes that much more substantial results can be expected in negotiations with other countries," Commerzbank strategist Volkmar Baur said. Steve Englander, global head of G10 currency research at Standard Chartered, said the buying of dollars might reflect more optimism that tariff deals are possible, rather than any real euphoria about the UK agreement itself. "For the time being, G10 markets would be relieved if U.S. and China bilateral tariffs were rolled back, even if they remain well above January 19 levels," he said in a note to clients. Meanwhile, bitcoin has surged back above $100,000, reflecting a refreshed appetite for risk-taking in markets' more speculative corners. Announcing the UK deal, Trump said he expects substantive negotiations between the U.S. and China this weekend and that tariffs on Beijing of 145% would likely come down. The administration is weighing a plan to slash the tariff on Chinese imports by more than half, the New York Post reported, citing unidentified sources, though the White House dismissed that as speculation. On the central bank front this week moves were as expected with the Bank of England cutting, while Sweden, Norway and the United States left rates on hold. However, Federal Reserve Chair Jerome Powell's remarks, emphasising the level of uncertainty, were taken as reducing the likelihood that U.S. rates will fall any time soon, prompting traders to cut back the chances of a June cut to about 17% from about 55% a week ago. In contrast with other G10 currencies, the dollar was lower on several Asian currencies this week after a shock surge in the Taiwan dollar. After a volatile few days it has settled around 30 to the dollar, more than 6% stronger from where it had finished April. The Singapore dollar is not far from decade highs. The Hong Kong dollar has retreated from the strong side of its band after heavy intervention from the Hong Kong Monetary Authority. India's rupee opened under renewed pressure on Friday as conflict between India and Pakistan escalates. It dropped sharply on Thursday and, at 85.55 to the dollar, is eyeing its heaviest weekly fall since 2022.
Zawya
25-04-2025
- Business
- Zawya
Stocks, forex set for weekly gains on signs of China-US tariff reprieve
A gauge for emerging market stocks was headed for a second straight week of gains on Friday as investors found solace in hints of a thaw in the U.S.-China trade standoff. The MSCI Emerging Markets Index climbed 0.4% on the day and was on course for a 2.7% gain for the week, marking its second week of advances. China exempted certain U.S. imports from its towering 125% tariffs and invited businesses to propose more goods they want to receive relief, according to businesses notified. In Washington, the White House is contemplating measures to ease the tension, with U.S. President Donald Trump affirming on Thursday that trade negotiations are in progress. "It remains to be seen how the current trade restrictions will be eased, whether through talks or a unilateral realisation that these tariffs are hurting themselves more than the other side," Volkmar Baur, foreign exchange analyst at Commerzbank said in a note. "This would certainly be welcomed by the financial markets." South Korea's Kospi index closed 0.9% higher, fuelled by the United States and Seoul's pledge to forge a trade package aimed at dismantling new U.S. tariffs, following discussions in Washington. Across Asia, nations are dispatching delegations, hopeful that the hefty U.S. tariffs, currently paused for 90 days, might be softened. Meanwhile, a currencies gauge held steady, signalling some caution prevailed as investors navigated a maze of mixed signals from the White House. It was poised, however, for a modest 0.1% uptick for the week. In South Asia, Indian benchmark indexes suffered a decline of over 0.6% each, as geopolitical tensions simmered after a deadly militant attack in Kashmir escalated frictions with neighbouring Pakistan. Islamabad's local bourse saw a decline of 0.3%, while hard-currency bonds were steady after a sharp drop on Thursday. Markets also monitored a report of a meeting between U.S. envoy Steve Witkoff and Russian President Vladimir Putin, at a time when Moscow pressed its attack on Ukraine and an imminent ceasefire appeared unlikely. Ukraine's international bonds inched up about one cent each, while Russia's rouble rose 0.5% ahead of a central bank monetary policy decision, with economists anticipating no change. Poland's zloty and the local stocks index were little changed. The government has sent a proposed judicial reform to European Union legal experts for approval in a new attempt to undo changes by its predecessor that prompted the EU to fine Poland and withhold funding for undermining judicial independence. South Africa's rand was muted as investors awaited clarity on a disputed national budget which has spewed uncertainty about the outlook of the factitious coalition government. Turkey's lira dipped 0.3%, with global ratings agency S&P set to review its credit rating against the backdrop of political turmoil that prompted central bank intervention to stabilize the currency.
Reuters
21-02-2025
- Business
- Reuters
South African rand stable after volatile week
JOHANNESBURG, Feb 21 (Reuters) - South Africa's rand was stable on Friday after a volatile week in which it weakened over the last-minute postponement of the national budget but then recovered thanks to a softer dollar and buoyant global gold price. At 0845 GMT, the rand traded at 18.33 against the dollar , not far from its previous close of 18.3225. The national budget was delayed on Wednesday due to disagreements within the country's coalition government over a proposal to hike value-added tax. Analysts said the postponement, unprecedented in the country's post-apartheid history, meant weeks of uncertainty before a new budget is presented in mid-March. The delay "highlights the risk that this grand coalition is an experiment that can go wrong at any time," Commerzbank analyst Volkmar Baur said in a research note. Andre Cilliers, a currency strategist at TreasuryONE, said markets would be looking to see whether the revised budget focuses on debt consolidation and expenditure cuts. If it does, the rand could strengthen, he said in another note. The U.S. dollar is near year-to-date lows, helping emerging market currencies such as the rand. Meanwhile, prices of gold, a major South African export, were on track for an eighth week of gains. South Africa's benchmark 2030 government bond was little changed in early deals, with the yield down 1 basis point at 9.18%.
