Latest news with #WSJDollarIndex
Mint
a day ago
- Business
- Mint
Wall street is too pessimistic on the Dollar. That could be a problem.
The dollar is struggling, and strategists overwhelmingly agree it's heading even lower. But with such strong consensus on a negative outlook, any positive news on the greenback could deliver an unexpected—and much harder—blow. For investors, it's a risk worth considering now. The U.S. Dollar Index, which measures the value of the dollar against a basket of foreign currencies, fell as low as 0.45% during Thursday's trading before recovering. The WSJ Dollar Index, a similar but newer index, fell to lows last seen in summer 2023 during the session, but finished at 95.21, a level that isn't particularly significant. That bodes well for Wall Street's big banks, who've been increasingly predicting a dollar rout. On Thursday, Deutsche Bank's macro strategist Tim Baker said the proposal for new levies on foreign investment adds to the firm's bearish view on the dollar. Bank of America's foreign-exchange strategist Alex Cohen referred to his team as 'core dollar bears." Morgan Stanley's Matthew Hornbach expects the dollar to slide in 2025 and some part of 2026. That's not all. JPMorgan Chase, Goldman Sachs, and Société Générale strategists are others part of this near-consensus view on the greenback. It's important to note that Wall Street isn't predicting an all-out demise for the U.S. dollar: The currency is entrenched within global financial machinery, and any significant decoupling by foreigners selling U.S. assets could take years. However, big money managers, hedge funds, and other institutions who've been holding lots of dollars by overweighting U.S. stocks or other dollar-denominated assets are rethinking exposure under a new, fast-paced regime in Washington, D.C. President Donald Trump's tariffs also imply fewer dollars in the hands of other countries as they sell less goods in the U.S. That, in turn, will reduces foreign nations' ability to buy as many U.S. assets. Also, the dollar's usual role as a safe haven and a buffer against market swings is being questioned: The greenback is not reacting to moves in the S&P 500 and other major indexes as it once did. But here's the kicker: Even with many factors pointing to further dollar weakness, its not crazy to think that the dollar could go up—and that makes the groupthink on the dollar risky. Economic data could give the dollar a much-needed boost. Initial jobless claims published on Thursday were higher than economists anticipated. However, the unemployment rate has remained rather steady at 4.2%, and inflation seems more or less in control; an improvement on the economic front can strengthen the dollar. 'While the longer-term USD outlook is still bearish, a move lower from here may require signs of cracks forming in the economic data," wrote Kit Juckes, Chief FX Strategist at Société Générale on Monday. Trump's evolving tariff policy is another wild card. Trump said he had a 'very good" phone call with Chinese President Xi Jinping on Thursday, which likely led to the dollar moderating its losses. It's unclear where negotiations between the U.S. and Europe stand, Cohen pointed out in a note listing upside risks to his bearish call. However, most harsh rhetoric between the U.S. and foreign powers has been walked back soon enough, he wrote. Goldman listed the comeback of U.S. exceptionalism talk as 'the biggest risk to our forecast for further Dollar depreciation." If Trump uses money from tariffs as fiscal support, that could eventually strengthen the dollar—and foreign investors may get drawn by even higher yields on bonds and cheaper equity valuations on stocks. When pessimism is this strong, its wise to consider if the market could have other plans that could make a sudden rebound hurt badly. Write to Karishma Vanjani at
New York Post
27-05-2025
- Business
- New York Post
Dow soars more than 400 points after Trump postpones 50% tariff on EU imports
Stocks surged on Tuesday as markets rebounded from last week's tariff scare following President Trump's decision to postpone new levies on the European Union after a weekend call with European Commission President Ursula von der Leyen. The Dow Jones Industrial Average soared by more than 400 points — or 1.16% while S&P 500 climbed 1%. The Nasdaq Composite, an index dominated by tech stocks, jumped 1.9%, or 367 points. Treasurys also rallied, sending the 10-year yield down from Friday's close above 4.5%. The WSJ Dollar Index also strengthened after touching a multi-month low late last week. 3 Stocks surged on Tuesday as markets rebounded from last week's tariff scare. AFP via Getty Images The upswing came as investors welcomed signs of a diplomatic thaw in US-EU trade tensions. On Friday, markets slid after Trump threatened to impose a 50% tariff on EU imports within days, while also warning that foreign-manufactured iPhones could face tariffs. But sentiment shifted after Trump confirmed the new duties would be delayed until July 9, giving both sides time to negotiate. In a post on Truth Social early Tuesday, Trump said the European Union had reached out to schedule talks: 'This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America.' EU trade chief Maroš Šefčovič said the bloc was committed to avoiding 'the mutual pain of tariffs' and would accelerate talks with Washington in the coming weeks. The White House has not publicly commented on the contents of the call between Trump and von der Leyen, though insiders say both sides are seeking a temporary framework to de-escalate tensions. European stocks also rallied, with Germany's DAX index hitting a record intraday high, as global investors cheered the delay in trade restrictions. 3 President Trump postponed tariffs on imports from the European Union over the weekend. AP The bond market staged a global rally, with long-dated government debt rising sharply, especially in Japan, amid speculation that Tokyo may reduce long-bond issuance. Elsewhere, gold prices fell nearly 2%, while Bitcoin hovered near $110,000, close to all-time highs. Investors are also turning their attention to key catalysts ahead. 3 Trump's decision to postpone new levies on the European Union came after a weekend call with European Commission President Ursula von der Leyen (above). AFP via Getty Images Chipmaker Nvidia is set to report earnings on Wednesday, with expectations high after its recent AI-fueled rally. Several other S&P 500 companies are also due to report this week, providing fresh insight into the health of corporate earnings. Meanwhile, the Federal Reserve will release minutes from its latest policy meeting, which are expected to shed light on its inflation outlook and rate path. The central bank's preferred inflation metric — the core PCE price index for April — is due later in the week. Speaking Tuesday, Minneapolis Fed President Neel Kashkari called for caution in adjusting monetary policy. 'It makes sense to keep rates on hold until we have more clarity on the global trade outlook,' Kashkari said. Fresh economic data released on Tuesday showed durable goods orders slipped in April — the same month Trump announced a fresh round of tariffs targeting strategic industries, adding another layer of uncertainty to the trade and growth picture.
Yahoo
26-05-2025
- Business
- Yahoo
U.S. Stock Futures, European Indexes Rise on Trump's EU Tariff Climbdown
U.S. stock futures and European shares gained Monday after President Trump gave the European Union a temporary reprieve on new threatened tariffs. Trump on Friday moved to ramp up the U.S. trade war with the EU, the U.S.'s largest trading partner, saying he planned to levy 50% tariffs starting June 1. He said that existing trade talks to avert planned, so-called reciprocal tariffs were 'going nowhere.' Buying 100% Made in America Is Really, Really Hard. These People Are Trying. Four Books Sound the Alarm About the Power of Private Equity Investors Pile Into ETFs at Record Pace Despite Market Turmoil Trump's Trade War Sends Chill Through Southern California Port Economy Why Exxon and Chevron Are Fighting So Hard Over an Oil Project in Guyana But on Sunday he pushed back the deadline for the new tariffs to July 9, after speaking with European Commission President Ursula von der Leyen, giving both sides more time to reach an agreement. Von der Leyen wrote on X that the EU was 'ready to advance talks swiftly and decisively' to target a good deal. Futures tied to major U.S. indexes rose more than 1% early Monday, while the benchmark Stoxx Europe 600 index rallied similarly. Markets in the U.S. are closed Monday for the Memorial Day holiday. 'This is nothing more than the usual 'threat and retreat' that has been the modus operandi of this tariff tennis we have witnessed since the start of the year,' said Florian Ielpo, head of macro at Lombard Odier Investment Managers in Geneva. Ielpo said the EU would likely push to reach a 10% 'baseline' tariff agreement with the U.S., which he didn't expect would have much impact on the bloc's economies. He forecast that European stocks would continue to perform strongly, with investors seeing Europe as a relative haven against U.S. uncertainty. Both U.S. and European stocks fell Friday on Trump's threat. The S&P 500 ended the week down 2.6%. The dollar held broadly steady Monday, after the WSJ Dollar Index settled Friday at its weakest level since September. The British pound continued to rally, advancing about 0.2% against the dollar. It settled Friday at a little under $1.354, the strongest since early 2022. The U.K. is potentially less exposed to trade uncertainty than many other economies, after London and Washington unveiled an outline trade deal earlier this month. Elsewhere, Japan's Nikkei 225 rose 1%, while Hong Kong's Hang Seng Index fell about 1.4%. Chinese auto stocks slumped after Tesla rival BYD offered discounts for many of its models, sparking industry concerns about a price war. BYD's shares in Hong Kong dropped 8.6%. Gold futures fell following a rally Friday. Bitcoin traded just below $110,000, close to record highs. Trump also warned Apple on Friday that iPhones and other smartphones made overseas could face significant levies, sending Apple shares down 3%. Shares in Apple rival Samsung Electronics gained nearly 1% in South Korea on Monday despite Trump saying the tariffs would extend to 'Samsung and anybody that makes that product.' Write to Angus Berwick at Immigration Is the Only Thing Propping Up California's Population The 90-Day Rush to Get Goods Out of China Solid Earnings Season Marred by Investors' New Fears Over Outlook WiseTech Accelerates Strategy With $2.1 Billion Move for e2open Sign in to access your portfolio
Wall Street Journal
06-05-2025
- Business
- Wall Street Journal
Heard on the Street Monday Recap: Tremendous Pushback
The WSJ Dollar Index weakened. The Taiwanese dollar, as of Monday, had appreciated nearly 10% in recent trading sessions. The move is potentially a preview of a world in which there is a long-term weakening of the greenback due to the global trade war, Heard on the Street's Telis Demos and Aaron Back say.
Wall Street Journal
05-05-2025
- Business
- Wall Street Journal
Heard on the Street Recap: Tremendous Pushback
What Happened in Markets Today The WSJ Dollar Index retreated. The Taiwanese dollar has appreciated nearly 10% in recent trading sessions. The move is potentially a preview of a world in which there is a long-term weakening of the U.S. dollar due to the Trump administration's global trade war, Heard on the Street writers Telis Demos and Aaron Back argue. Trump announced tariffs on films produced overseas. The announcement—made over the president's Truth Social network—was scant on details, but it weighed on stocks, with Netflix closing down 1.9%. Some analysts so far are skeptical, noted Heard on the Street writer Dan Gallagher. 'We think the Trump administration will face tremendous pushback,' wrote Michael Pachter of Wedbush in a note to clients.
