Latest news with #tradeUncertainty
Bloomberg
4 days ago
- Business
- Bloomberg
US, Europe See Biggest Drop in CEO Confidence: Report
Confidence among CEOs in Europe has plummeted, according to a new report by the Conference Board, which says pessimism is likely being driven by geopolitical tensions and trade uncertainty. Maria Demertzis, The Conference Board Economy, Strategy, and Finance Center Europe Leader joined Francine Lacqua on "The Pulse". (Source: Bloomberg)
Globe and Mail
02-06-2025
- Business
- Globe and Mail
Bank of Canada expected to remain on pause after strong economic data
The Bank of Canada is expected to hold its key interest rate steady on Wednesday after inflation and economic growth figures were stronger than anticipated, though analysts believe rate cuts will come later this year amid trade uncertainty and the potential for a recession. Financial market odds of a rate cut dipped slightly to 20 per cent as of Friday, according to Bloomberg data, after Statistics Canada's gross domestic product report showed the economy grew at an annualized rate of 2.2 per cent in the first quarter. The central bank's decision 'will still be a close call, but with economic data holding up better than feared ... a second consecutive hold on the overnight rate looks more likely than a cut at this stage,' wrote Royal Bank of Canada assistant chief economist Nathan Janzen in a client note on Friday. The Bank of Canada held its key interest rate at 2.75 per cent in April, a decision Governor Tiff Macklem justified by pointing to the uncertainty clouding the trade outlook. 'At this meeting, we decided to hold our policy rate unchanged as we gain more information about both the path forward for U.S. tariffs and their impacts,' Mr. Macklem said on April 16. Some forecasters were anticipating the central bank to follow up with a rate cut in June, but new economic data swayed expectations. Canada's inflation rate fell to 1.7 per cent in April, a decrease that was driven by the removal of the consumer carbon price. But underlying price pressures were stronger than expected, with both of the Bank of Canada's preferred measures of core inflation accelerating from the previous month. Economists still expect the central bank to cut interest rates at some point this year to support an economy facing U.S. tariffs and heightened uncertainty. Signs of weakness have already emerged in the labour market, with the unemployment rate rising to 6.9 per cent in April. Stephen Brown, deputy chief North America economist at Capital Economics, noted that the first-quarter GDP report was helped by an increase in exports as U.S. companies stockpiled ahead of tariffs. 'Rather than weigh on the economy, the tariffs have had a kind of a temporary boost to GDP, but we know that that will be reversed before long,' Mr. Brown said in an interview. The impact of U.S. tariffs on Canadian goods exports is expected to be captured in second- and third-quarter growth data. Mr. Brown said the weak economic outlook for the coming months is why he's still expecting a rate cut this week. 'It doesn't really matter if the [central] bank cuts in June or July, I don't suppose. But I think when it can see a reason to cut, the bank has tended to cut rather than wait to be 100 per cent sure,' he said. 'So I'm not going to give up on the call just yet, but it's not something I'm particularly confident in.' Andrew Hencic, a senior economist at Toronto-Dominion Bank, said trade uncertainty makes it difficult to predict the path for interest rates. Mr. Hencic expects the central bank to cut interest rates two more times this year, which he said 'would probably provide enough support for the economy to keep chugging along.' Last Wednesday, the U.S. Court of International Trade ruled that President Donald Trump does not have 'unbound' authority to impose tariffs and ordered the administration to lift many of its duties, including the ones placed on Canada and Mexico on fentanyl-related grounds. The tariffs were then temporarily reinstated by an appellate court. Sector-specific duties – such as those pertaining to Canadian steel, aluminum and vehicles – were unaffected by the ruling and remain in place. Mr. Hencic said those kinds of developments make it difficult for the Bank of Canada to set its policy, let alone provide any clarity on where interest rates are headed. 'From the Bank of Canada's perspective, it's unfortunate that they have to adjust and make decisions in a period of time where it's highly uncertain, and there's going to be an element of data dependency in trying to forecast forward,' he said.
The Independent
29-05-2025
- Business
- The Independent
Trump fury over US court bid to block tariffs – as experts warn uncertainty could hit economy
A cloud hangs over the global economy, experts have warned after a bombshell court ruling blocked Donald Trump's tariffs, creating more global economic 'confusion and uncertainty'. Financial markers reacted positively to the unanimous ruling by three judges, but the decision enraged the White House, with Trump's official spokesman Stephen Miller calling it another 'judge coup'. The White House has appealed the decision, but it means all of the president's 'Liberation Day' tariffs now face a protracted legal process that could overshadow trade talks and delay the implementation of existing deals, including with Britain. Only the 25 per cent tariffs on steel, aluminium, and cars are unaffected by the ruling. Chris Southworth, secretary general of the International Chamber of Commerce United Kingdom (ICCUK), said months of legal wrangling would further weaken economic confidence. He said: 'It just puts a whole cloud over the top of any negotiation with the US because it's unclear what the US is negotiating and what their position will be from a legal standpoint. 'The problem is, these tariffs change almost every day with the US at the moment, and this uncertainty isn't good for business.' Marco Forgione, director general of the Chartered Institute of Export and International Trade, is also worried about the impact. He said: 'It's clear that we live now in a time of growing uncertainty. But businesses, especially our world-leading food and drink producers, should not rush to react. Whatever the outcome of the legal appeal, keeping calm is the best approach. 'The UK must keep backing open, rules-based trade to give our exporters the certainty they need to succeed.' Trade economist Simon Evenett told The Independent that the ruling could mean tariffs on sensitive sectors such as cars, steel, aluminium and pharmaceuticals intensify instead of coming down, as they're not covered by the judgement. He said: "Britain's principal interests lay in the area of cars, steel, aluminium and pharmaceuticals. All of these are covered by investigations under national security and are not covered by the ruling yesterday. This means the risks to the UK in those sensitive sectors remain, and are likely to intensify.' However, an ally of the Trump administration – Andrew Hale, a trade expert from the influential Heritage Foundation – told The Independent that the judges' decision is 'good news' for the UK. Mr Hale described the deal signed by Trump and Sir Keir Starmer earlier this month as 'just a framework document with very little in it'. He added: 'It was meant to be a start for further trade negotiations and deal with some of the tariffs. So [the ruling] is good news [for the UK] because it prevents the [Trump administration] because it is detrimental to the Trump administration; negotiations. They cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs quickly and broadly as a negotiating tactic in negotiations.' In a speech on Thursday, Sir Keir Starmer defended his deal with Trump despite new question marks over the terms – and revelations the US has yet to lower tariffs on car and steel exports from the UK as originally agreed. The prime minister highlighted how the deal will ultimately help workers at Jaguar Land Rover (JLR), whose jobs had been under threat. But the uncertainty created by levies has already led to smaller firms in the UK abandoning the US market, according to Federation of Small Business (FSB) policy chair Tina McKenzie. She said: 'This court decision offers the possibility of short-term relief for small businesses trading across the Atlantic, many of whom have spent the last few months caught in a tangle of uncertainty, shifting rules and sudden extra costs. In fact, one in five said they had already stopped, or may stop, exporting to the US altogether.' The Commons select committee on business and trade is set to open an inquiry on trade with the US. Labour committee chairman Liam Byrne said: 'There's still considerable uncertainty about when the sector-specific exemptions in the recent deal actually come into effect, and what UK firms need to do to access them. This is a key thing we want to cover next week. On the broader tariffs, my understanding is that these now go back to the previous level.' Meanwhile, Lib Dem leader Sir Ed Davey demanded that the foreign secretary David Lammy summoned the new US ambassador, Warren Stephens to explain the situation. He said: 'The levels of chaos from Trump's economic policy is putting Liz Truss to shame.'
Free Malaysia Today
29-05-2025
- Business
- Free Malaysia Today
Dollar rallies after Trump's tariffs face court roadblock
The US dollar rose 0.64% against the yen at 145.77 after touching a two-week high of 146.2 earlier in the session. (Freepik pic) SINGAPORE : The US dollar strengthened against major peers today after a court blocked President Donald Trump from imposing his import tariffs on other countries, providing some relief for the currency that has struggled this year due to trade uncertainty. The greenback was trading off session highs after an initial knee-jerk spike following a trade court ruling that found Trump overstepped his authority by imposing across-the-board duties on imports from US trading partners. In response, the Trump administration filed an appeal within minutes. 'It's almost impossible to know if the tariffs will be completely unwound by this. 'However, in the hypothetical situation that they are, it's natural to see dollar appreciation,' said Yunosuke Ikeda, head of macro research at Nomura in Tokyo. 'Trump's tariffs will lead to stagflation pressure on the US economy, so reversing those tariffs would be a positive for the dollar,' Ikeda said. US assets including the dollar, equities and longer-dated Treasury bonds have witnessed sharp declines in recent months as investors reassessed historic assumptions around the strength and outperformance of US markets as Trump's erratic trade and tax policies sap confidence and spur inflation. Today, the dollar reversed some of those moves and rose 0.64% against the yen at 145.77 after touching a two-week high of 146.2 earlier in the session. It was last 0.67% higher against the Swiss franc at 0.83245. The euro slipped 0.4% to US$1.12445 and sterling slightly weaker at US$1.344. That left the dollar index, which measures the US currency against six major peers, back above 100 for the first time in a week. 'There's an initial reaction of a stronger dollar and weaker yen. However, considering judicial processes like appeals, I don't expect a continuous rise in the dollar,' said Hirofumi Suzuki, chief FX strategist at SMBC. Despite today's spike, the index is down 8% this year and analysts said that the new court ruling did little to offer clarity on the outlook for tariffs and they were sceptical of a sustained dollar rally in the face of a long court battle. Treasuries were also sold off, with yield on the 10-year note up 2.6 basis points at 4.503%. The greenback has weakened about 2% against the Japanese yen, nearly 6% against the Swiss franc and 4% against the euro since Trump slapped harsh levies on global economies on April 2, while the broader dollar index has fallen more than 3%. 'The markets are buying back the dollar on the news, rather than selling the yen,' said Tohru Sasaki, chief strategist at Fukuoka Financial Group. 'But if the dollar continued to rise to above 148 yen, speculative short yen positions may be forced to unwind, causing the dollar-yen pair to rise even more,' he said. US stock futures and Asian bourses jumped on a risk-on rally. Traders also cut their expectations for interest rate cuts by the Federal Reserve to 42 basis points of easing compared to 50 basis points earlier in the week, LSEG data showed. Investor focus this month has been on the bond market, with lacklustre demand for longer-dated debt globally drawing attention to worsening government deficits, while also monitoring any developments on Trump's US tax and spending bill. Moody's this month lowered its US credit rating, citing the worsening fiscal outlook for the world's biggest economy. However, investor sentiment slightly improved this week after Trump delayed on the weekend a plan to impose 50% tariffs on EU imports and investors are on the lookout for any signs of improving relations between the US and its trade partners.
Zawya
29-05-2025
- Business
- Zawya
Dollar surges after US court blocks Trump's tariffs
SINGAPORE - The U.S. dollar rallied on Thursday in knee-jerk reaction to a court blocking President Donald Trump from imposing his import tariffs on other countries, providing some relief for the currency that has struggled this year due to trade uncertainty. The Manhattan-based Court of International Trade said the U.S. Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president's emergency powers to safeguard the U.S. economy. In response, the Trump administration filed an appeal within minutes. "It's almost impossible to know if the tariffs will be completely unwound by this. But in the hypothetical situation that they are, it's natural to see dollar appreciation," said Yunosuke Ikeda, head of macro research at Nomura in Tokyo. "Trump's tariffs will lead to stagflation pressure on the U.S. economy, so reversing those tariffs would be a positive for the dollar." U.S. assets including the dollar, equities and longer-dated Treasury bonds have witnessed sharp declines in recent months as investors reassessed historic assumptions around the strength and outperformance of U.S. markets as Trump's erratic trade and tax policies sap confidence and spur inflation. On Thursday, the dollar reversed some of those moves and rose 0.72% against the yen to 145.86 and 0.63% against the Swiss franc to 0.8326. The euro slid 0.42% to $1.1245 and sterling fell 0.30% to $1.3432. That left the dollar index , which measures the U.S. currency against six major peers, back above 100 for the first time in a week. The index, though, is down 8% this year and analysts remain sceptical of a sustained dollar rally and expect a long court battle over tariffs. "There's an initial reaction of a stronger dollar and weaker yen. However, considering judicial processes like appeals, I don't expect a continuous rise in the dollar," said Hirofumi Suzuki, chief FX strategist at SMBC. The greenback has weakened about 2% against the Japanese yen, nearly 6% against the Swiss franc and 4% against the euro since Trump slapped harsh levies on global economies on April 2, while the broader dollar index has fallen more than 3%. "The markets are buying back the dollar on the news, rather than selling the yen," said Tohru Sasaki, chief strategist at Fukuoka Financial Group. "But if the dollar continued to rise to above 148 yen, speculative short yen positions may be forced to unwind, causing the dollar-yen pair to rise even more," he said. U.S. stock futures and Asian bourses jumped on a risk-on rally. Traders also cut their expectations for interest rate cuts by the Federal Reserve to 42 basis points of easing compared to 50 basis points earlier in the week, LSEG data showed. Investor focus this month has been on the bond market, with lacklustre demand for longer-dated debt globally drawing attention to worsening government deficits. Traders are also watching progress of a budget and spending bill in the U.S. Congress that is expected to add trillions of dollars of debt. But sentiment about the U.S. economy has improved after Trump delayed on the weekend a plan to impose 50% tariffs on European Union imports and investors are on the lookout for any signs of improving relations between the United States and its trade partners. (Reporting by Rae Wee, Stella Qiu, Johann M Cherian and Ankur Banerjee; Editing by Christopher Cushing and Jamie Freed)
