Latest news with #dollarweakness
Bloomberg
23-07-2025
- Business
- Bloomberg
Bloomberg Surveillance: Trade and Earnings
Watch Tom and Paul LIVE every day on YouTube: Bloomberg Surveillance hosted by Tom Keene & Paul Sweeney July 23rd, 2025 Featuring: 1) Katy Kaminski, Chief Research Strategist at AlphaSimplex, talks about equities' positive trend, fixed income stalemates, and dollar weakness. Global stocks have roared back from their April slump on expectations countries will strike agreements with the US ahead of an Aug. 1 deadline, avoiding significant damage to company earnings and the global economy. Among the companies reporting Wednesday are Tesla and Alphabet. 2) Peter Conti-Brown, professor at Wharton Business School and author of "The Power and Independence of the Federal Reserve," discusses the history and importance of Fed independence. There's a long history of US presidents putting pressure on the Federal Reserve to lower interest rates, but the techniques have often been subtle or quiet in some way. Investors are taking seriously the prospect that President Trump will find a way or a reason to remove Fed Chair Jay Powell before the end of his term next year. 3) Mike Mayo, Head: US Large Cap Bank Research at Wells Fargo, breaks down recent bank earnings, new regulations, and outlook for America's big banks. 4) Ivan Feinseth, CIO at Tigress Capital Partners, gives us a preview of big tech earnings and talks about his bullish S&P call. Analysts will be studying the latest quarterly earnings from big tech for signs of resilience. A gauge of the so-called 'Magnificent Seven' giants halted a nine-day advance Tuesday. 5) Lisa Mateo joins with the latest headlines in newspapers across the US, including WSJ's report on Europe turning focus to air conditioning and Business Insider's story on the hottest tote for moms this summer and why Wall Street's paying attention.
Yahoo
06-07-2025
- Business
- Yahoo
Dollar Doubters Seed Historic Gains for Developing World Debt
(Bloomberg) -- US policy volatility has sent money managers scouring the world for alternatives, propelling local bonds from emerging-market countries to their best first half in 16 years. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Massachusetts to Follow NYC in Making Landlords Pay Broker Fees NYC Commutes Resume After Midtown Bus Terminal Crash Chaos What Gothenburg Got Out of Congestion Pricing The surge in demand for fixed-income assets in EM currencies is largely the flip side of sinking confidence in the US dollar, which has tumbled almost 11% this year. That's its worst performance since the 1970s, and the losses are across the board, with the greenback falling against 19 of the 23 most-traded emerging-market currencies, and by at least 10% against 10 of them. The upshot is that an index of emerging-market local debt has returned more than 12% in the first half of the year, according to data compiled by Bloomberg, beating hard-currency bonds, which were up 5.4% in the same period. The first-half gains were the strongest since at least 2009. 'I don't think anyone had this much dollar weakness on their bingo card,' said Edwin Gutierrez, head of emerging-market sovereign debt at Aberdeen Group Plc. 'We thought local-currency debt would outperform hard-currency, but not by the magnitude that it ended up.' The money is flowing in unprecedented amounts. EM-debt funds attracted more than $21 billion so far this year, Bank of America Corp. said on Wednesday, citing EPFR Global data. These funds drew inflows for each of the past 11 weeks and $3.1 billion in the week through July 2. More Rate Cuts Boosting the case further is the prospect of interest-rate cuts in developing countries, according to Lewis Jones, a debt manager at William Blair Investment Management in New York. 'We expect more capacity from emerging central banks to cut rates, and also the trend of a weaker dollar versus the euro to continue,' he said. 'For European investors it could look more attractive looking forward.' Latin American economies have handed investors some of their best returns, with Mexico's local bonds, known as Mbonos, generating a gain of 22%, while some of Brazil's government bonds have returned more than 29%. The Brazilian notes bounced following a sharp selloff late last year, while traders piled into bets that policymakers are done with their hiking cycle. 'We remain invested in Mexican bonos, the trade is not over for us,' said Adriana Cristea, senior investment manager at Pictet Asset Management, adding that the firm has positions in local bonds across emerging markets regions, from Latin America to EMEA and Asia. Improving economic fundamentals in some emerging markets may also bring new issuers to the market. Ghana, Africa's top gold producer, is planning to resume domestic bond sales later in 2025 after short-term borrowing costs fell to the lowest in three years. Easing tensions between Israel and Iran also boost the investment case for local debt from the developing world. Despite the rally, Aberdeen's Gutierrez isn't yet looking to take profits on positions in EM local debt. He said his main overweights are Colombia, the Philippines and South Africa. More broadly, investors favor Brazil, South Africa and Turkey, BofA's head of global emerging markets fixed-income strategy David Hauner wrote in a note on July 3 based on feedback from clients. 'It will be a multi-year process' of rethinking US exposure, said Brad Godfrey, co-head of emerging markets debt at Morgan Stanley Investment Management, who helps oversee $20.6 billion. 'It will be a relearning process for some people that hadn't been exposed to local in a while.' What to Watch US to publish initial jobless claims data FOMC meeting minutes Hungary will release fiscal figures through June Peru, Egypt, Romania, South Korea, Israel, Malaysia central banks hold its monetary policy decision --With assistance from Selcuk Gokoluk and Srinivasan Sivabalan. For Brazil's Criminals, Coffee Beans Are the Target SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate China's Homegrown Jewelry Superstar ©2025 Bloomberg L.P. 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
Yahoo
30-06-2025
- Business
- Yahoo
Gold prices edge higher as dollar weakens
Gold prices inched higher on Monday morning, and continue to trade near all-time highs, with weakness in the dollar offering support to the precious metal. Gold futures (GC=F) were up 0.2% at $3,293.30 an ounce at the time of writing, while the spot gold price climbed 1.4% to $3,286.03 per ounce. Meanwhile, the US dollar ( index, which measures the greenback against a basket of six currencies, was down 0.2% to 97.17. Gold tends to have an inverse relationship to the dollar, as it is typically traded in the US currency, so weakness in the greenback makes the precious metal cheaper for overseas buyers. Read more: FTSE 100 LIVE: Markets higher as US-UK trade deal comes into force The rise in gold prices came despite more positive developments on trade, with investors typically turning to the precious metal as a safe-haven amid uncertainty. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Exuberance is set to continue at the start of the week, as more trade deal scores are on the doors and geopolitical tensions have eased off. "Talks between Canada and the US are back on the cards, after an agreement to scrap a tax targeting American tech firms," she said. "There will now be speculation that other countries, like the UK, will be forced to drop their own taxes targeting the biggest tech firms in the world when further talks take place." Streeter added: "The trade deal announced again between the US and China, has poured more optimism into glass half full attitudes. Even though it's still pretty scant on detail, the agreement looks set to give US companies better access to crucial rare earth minerals, exported from China." The pound dipped 0.1% lower against the dollar (GBPUSD=X) on Monday, to trade at $1.3694, as investors weighed the latest UK economic data releases. The Office for National Statistics (ONS) confirmed a preliminary estimate that the UK economy expanded by 0.7% in the first three months of the year However, the household savings ratio, a measure of how much people save, fell for the first time in two years, to 10.9% from 12%, as people spent more on fuel, rent and restaurant meals. Danni Hewson, head of financial analysis at AJ Bell (AJB.L), said: "Confirmation that the UK economy delivered the fastest growth of any G7 country at the start of the year feels almost redundant. Read more: Trending tickers: Palantir, Boeing, UBS, WH Smith and Hikma Pharmaceuticals 'A mix of tariff woes and tax hikes have created a period of such uncertainty and instability that many businesses have simply pressed pause on their future plans, and in some cases taken the decision to cut labour costs in order to set them up for what might be down the tracks." "The early growth spurt looks set to be an anomaly rather than the sustained expansion the government needs if it's to pad treasury coffers without resorting to tax rises or further spending cuts," she added. In other currency moves, the pound was slightly lower against the euro (GBPEUR=X), trading at €1.1683 at the time of writing. Oil prices dipped on Monday morning, amid easing geopolitical risks, following sharp movements in the commodity last week. Brent crude (BZ=F) futures edged 0.1% lower to $66.74 per barrel, at the time of writing, while West Texas Intermediate futures (CL=F) fell 0.3% to $65.35 a barrel. Stocks: Create your watchlist and portfolio "With the Iran-Israel-US truce holding, geopolitical tensions have calmed and that's kept downwards pressure on oil prices," said Hargreaves Lansdown's Streeter. "Brent Crude has fallen 14% over the past week as the easing of supply disruption worries collided with expectations that OPEC+ nations would ramp up production. There is still expected to be fall out for global growth, due to the impact of US trade policies, so the expectation of lower demand for energy is also weighing on prices." More broadly, the FTSE 100 (^FTSE) fell 0.3% on Friday morning to 8,773 points. For more details, on broader market movements check our live coverage here. Read more: What to watch this week: UK shop prices, US employment, Constellation Brands, M&S and Sainsbury's Global economy to slow amid 'most severe trade war since 1930s', says Fitch UK economy grew 0.7% in first quarter of the yearError 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
Khaleej Times
19-06-2025
- Business
- Khaleej Times
Ailing dollar softens Europe's hit from any oil shock
While oil-importing countries won't fully escape a hit in the event of another energy price shock on Middle East tensions, a period of rare dollar weakness will soften the blow considerably for countries outside America. Most crude prices are denominated in U.S. dollars, so when jumps in the oil price occur during periods of relentless dollar strength, the pain is compounded for regions like Europe. This year's dollar swoon, however, has had the opposite effect, cushioning the impact of the oil price increase set off by the unfolding Israel-Iran war. To be sure, we're still far from 'shock' territory. Dollar-based global crude prices have jumped about 14% since early last week, but they remain well below January peaks and about 7% lower year-over-year. But the impact has been even more benign in Europe, due to the euro's 12% rise against the dollar in the year to date. While the oil price in dollars has all but wiped out its decline for the year so far, the euro price of Brent crude is still down 12% in 2025 and is 20% lower than one year ago. "For oil-importing nations, the greenback's decline offers a crucial reprieve, helping to cushion the blow from soaring oil prices and to limit broader economic fallout," UniCredit strategist Tobias Keller wrote on Wednesday. Should the dollar continue to weaken, it could mitigate the relative economic impact on Europe of any renewed energy price squeeze. That, in turn, could support Europe's performance versus the United States this year and further erode the American exceptionalism narrative fueling extraordinary portfolio flows to the U.S. in recent years. What's more, ongoing dollar weakness amid a fresh energy price retreat would just load more pressure on the European Central Bank to cut interest rates to prevent a big undershoot of its 2% inflation target. Increasingly unstable The dollar/oil link is yet another example of a financial relationship that, in the words of UniCredit's Keller, has become "increasingly unstable" this year. As foreign investors with trillions of dollars invested in U.S. stocks and bonds have started rethinking their dollar exposure in light of America's trade wars, re-worked alliances and upended domestic institutions, the dollar's correlation with stocks, bonds and commodities has shifted. Most obvious is the greenback's apparent loss of its traditional 'safe haven' status during times of great uncertainty and stress, with the dollar falling alongside both stocks and bonds during a turbulent April. The dollar/oil link has become particularly unstable. All else being equal, a stronger dollar should weaken oil prices by sapping non-American demand around the world due to the added local currency cost of a barrel of oil. And the opposite should, in theory, also be true. Yet the cause-and-effect was the other way around in recent years, as a spike in oil prices after Russia's 2022 Ukraine invasion spurred inflation and steep Federal Reserve interest rate rises, followed by a subsequent decline in oil prices and inflation and the beginning of a Fed easing cycle. During that series of events, the dollar moved broadly in tandem with energy prices. When the oil price doubled between mid-2021 and the immediate aftermath of the Ukraine invasion, the dollar index surged by 20%, magnifying the impact of rising energy costs for Europe and elsewhere. But that relationship broke down again last year after the U.S. election, as the dollar initially climbed even as oil prices fell. While the positive correlation resumed after January, the surge in crude this month after the Israel-Iran war broke out has not been matched by a strengthening dollar. Indeed, the greenback is still flirting with new lows. The relationship depends on the backdrop of course. Right now, the primary concern is that a decade of relentless dollar strength now faces a multi-year unwind as trade, economic and investment imbalances are forced to correct. If that prevails, any renewed oil spike would be less severe than last time for the global economy at large.
Reuters
19-06-2025
- Business
- Reuters
Ailing dollar softens Europe's hit from any oil shock
LONDON, June 19 (Reuters) - While oil-importing countries won't fully escape a hit in the event of another energy price shock on Middle East tensions, a period of rare dollar weakness will soften the blow considerably for countries outside America. Most crude prices are denominated in U.S. dollars, so when jumps in the oil price occur during periods of relentless dollar strength, the pain is compounded for regions like Europe. This year's dollar swoon, however, has had the opposite effect, cushioning the impact of the oil price increase set off by the unfolding Israel-Iran war. To be sure, we're still far from 'shock' territory. Dollar-based global crude prices have jumped about 14% since early last week, but they remain well below January peaks and about 7% lower year-over-year. But the impact has been even more benign in Europe, due to the euro's 12% rise against the dollar in the year to date. While the oil price in dollars has all but wiped out its decline for the year so far, the euro price of Brent crude is still down 12% in 2025 and is 20% lower than one year ago. "For oil-importing nations, the greenback's decline offers a crucial reprieve, helping to cushion the blow from soaring oil prices and to limit broader economic fallout," UniCredit strategist Tobias Keller wrote on Wednesday. Should the dollar continue to weaken, it could mitigate the relative economic impact on Europe of any renewed energy price squeeze. That, in turn, could support Europe's performance versus the United States this year and further erode the American exceptionalism narrative fueling extraordinary portfolio flows to the U.S. in recent years. What's more, ongoing dollar weakness amid a fresh energy price retreat would just load more pressure on the European Central Bank to cut interest rates to prevent a big undershoot of its 2% inflation target. The dollar/oil link is yet another example of a financial relationship that, in the words of UniCredit's Keller, has become "increasingly unstable" this year. As foreign investors with trillions of dollars invested in U.S. stocks and bonds have started rethinking their dollar exposure in light of America's trade wars, re-worked alliances and upended domestic institutions, the dollar's correlation with stocks, bonds and commodities has shifted. Most obvious is the greenback's apparent loss of its traditional 'safe haven' status during times of great uncertainty and stress, with the dollar falling alongside both stocks and bonds during a turbulent April. The dollar/oil link has become particularly unstable. All else being equal, a stronger dollar should weaken oil prices by sapping non-American demand around the world due to the added local currency cost of a barrel of oil. And the opposite should, in theory, also be true. Yet the cause-and-effect was the other way around in recent years, as a spike in oil prices after Russia's 2022 Ukraine invasion spurred inflation and steep Federal Reserve interest rate rises, followed by a subsequent decline in oil prices and inflation and the beginning of a Fed easing cycle. During that series of events, the dollar moved broadly in tandem with energy prices. When the oil price doubled between mid-2021 and the immediate aftermath of the Ukraine invasion, the dollar index (.DXY), opens new tab surged by 20%, magnifying the impact of rising energy costs for Europe and elsewhere. But that relationship broke down again last year after the U.S. election, as the dollar initially climbed even as oil prices fell. While the positive correlation resumed after January, the surge in crude this month after the Israel-Iran war broke out has not been matched by a strengthening dollar. Indeed, the greenback is still flirting with new lows. The relationship depends on the backdrop of course. Right now, the primary concern is that a decade of relentless dollar strength now faces a multi-year unwind as trade, economic and investment imbalances are forced to correct. If that prevails, any renewed oil spike would be less severe than last time for the global economy at large. The opinions expressed here are those of the author, a columnist for Reuters.
