Dollar holds firm against euro, yen as US trade pressure mounts
The greenback rallied from multi-year lows against the euro and British pound hit earlier in the week after stronger than expected US jobs data pushed out the timing for potential rate cuts by the Federal Reserve.
New Zealand's kiwi dollar, a common proxy for risk appetite, rose 0.2 per cent to US$0.608 after US stocks climbed to new record levels.
The Republican-controlled House of Representatives narrowly passed Trump's 'One, Big, Beautiful Bill' of spending and tax cuts that is estimated to add US$3.4 trillion (RM14.4 trillion) to the nation's US$36.2 trillion debt.
With the US closed for Independence Day, attention turns to Trump's July 9 deadline when sweeping tariffs take effect on countries like Japan that have not yet secured trade agreements.
'The dynamic is raising questions about fiscal sustainability and bond market stability,' said Kyle Rodda, senior financial markets analyst at Capital.com, referring to the bill's passage.
'However, for now, those risks are being looked through as the markets embrace signs of labour market resilience and hopes for further US trade deals.'
The dollar index, which tracks the greenback against major peers, had its worst first half since 1973 as Trump's chaotic roll-out of sweeping tariffs stoked concerns about the US economy and the safety of Treasuries.
Trump said the US will start sending letters to countries today specifying what tariff rates they will face, a shift from earlier pledges to ink individual deals.
Against the yen the dollar was traded at ¥144.69, down 0.2 per cent from late in the US trading day when it surged 0.8 per cent. The euro added 0.1 per cent to US$1.1769, while sterling traded at US$1.3668, up 0.1 per cent.
The Australian dollar fetched US$0.6577, up 0.1 per cent in early trade.
US Labor Department's closely watch employment report yesterday showed that nonfarm payrolls increased by 147,000 jobs in June, well ahead of economists' forecast in a Reuters poll for a rise of 110,000.
Market expectations that the Fed will leave rates unchanged at its July meeting rose to a 95.3 per cent probability, up from 76.2 per cent previously, according to the CME's Fedwatch tool.
Economists continue to expect the Fed would not start cutting rates again until September or even later. — Reuters
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Free Malaysia Today
2 hours ago
- Free Malaysia Today
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The group's difficulties have been compounded by seismic shifts in the regional power balance since Israel decimated its command, killed thousands of its fighters and destroyed much of its arsenal last year. Hezbollah's Syrian ally, Bashar al-Assad, was toppled in December, severing a key arms supply line from Iran. Tehran is now emerging from its own bruising war with Israel, raising doubts over how much aid it can offer, a regional security source and a senior Lebanese official told Reuters. Another senior official, who is familiar with Hezbollah's internal deliberations, said the group had been holding clandestine discussions on its next steps. Small committees have been meeting in person or remotely to discuss issues including its leadership structure, political role, social and development work, and weapons, the official said on condition of anonymity. The official and two other sources familiar with the discussions indicated Hezbollah has concluded that the arsenal it had amassed to deter Israel from attacking Lebanon had become a liability. Hezollah 'had an excess of power', the official said. 'All that strength turned into a weak point.' Under the leadership of Hassan Nasrallah, who was killed last year, Hezbollah grew into a regional military player with tens of thousands of fighters, rockets and drones poised to strike Israel. It also provided support to allies in Syria, Iraq and Yemen. Israel came to regard Hezbollah as a significant threat. When the group opened fire in solidarity with its Palestinian ally Hamas at the start of the Gaza war in 2023, Israel responded with airstrikes in Lebanon that escalated into a ground offensive. Hezbollah has since relinquished a number of weapons depots in southern Lebanon to the Lebanese armed forces as stipulated in last year's truce, though Israel says it has struck military infrastructure there still linked to the group. Hezbollah is now considering turning over some weapons it has elsewhere in the country – notably missiles and drones seen as the biggest threat to Israel – on condition Israel withdraws from the south and halts its attacks, the sources said. But the group won't surrender its entire arsenal, the sources said. For example, it intends to keep lighter arms and anti-tank missiles, they said, describing them as a means to resist any future attacks. Hezbollah's media office did not respond to questions for this article. Isreal's military said it would continue operating along its northern border in accordance with the understandings between Israel and Lebanon, in order eliminate any threat and protect Israeli citizens. The US state department declined to comment on private diplomatic conversations, referring questions to Lebanon's government. Lebanon's presidency did not respond to questions. For Hezbollah to preserve any military capabilities would fall short of Israeli and US ambitions. Under the terms of the ceasefire brokered by the US and France, Lebanon's armed forces were to confiscate 'all unauthorized arms', beginning in the area south of the Litani River – the zone closest to Israel. Lebanon's government also wants Hezbollah to surrender the rest of its weapons as it works to establish a state monopoly on arms. Failure to do so could stir tensions with the group's Lebanese rivals, which accuse Hezbollah of leveraging its military might to impose its will in state affairs and repeatedly dragging Lebanon into conflicts. All sides have said they remain committed to the ceasefire, even as they traded accusations of violations. 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Free Malaysia Today
2 hours ago
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15 killed in Gaza as Trump waits for Hamas's response to truce proposal
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The Star
2 hours ago
- The Star
FBM KLCI closes slightly higher ahead of Trump's trade decision
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