Dollar wallows near 3-1/2-year low as Fed cuts, Trump bill in focus
The greenback was pinned near its weakest since September 2021 on the euro, and was at its lowest since January 2015 versus the Swiss franc.
Powell reiterated on Tuesday at the European Central Bank's annual conference in Sintra, Portugal that the Fed is taking a patient approach to further interest rate cuts, but didn't rule out a reduction at this month's meeting, saying everything depends on incoming data.
That raises the stakes for the monthly non-farm payrolls report on Thursday. Indications of labour market resilience in the U.S. JOLTS figures overnight saw the dollar rise off Tuesday's lows.
The dollar index, which measures the currency against six major counterparts, edged up slightly to 96.677, but didn't stray far from the overnight low of 96.373.
Markets are also keeping a close watch on Trump's massive tax-and-spending bill, which could add $3.3 trillion to the national debt. The bill, which was passed by the U.S. Senate, will return to the House for final approval.
"The confirmation that this is an increase in issuance, an increase in government spending well beyond its means, is not necessarily good news for the Treasury market, and it's arguably one of the reasons the dollar's going down," said Rodrigo Catril, a strategist at National Australia Bank.
Also weighing on the U.S. currency has been Trump's continued attacks on Powell, putting Fed independence in the spotlight. On Monday, the President sent the Fed Chair a list of global central bank key rates adorned with handwritten commentary saying the U.S. rate should be between Japan's 0.5% and Denmark's 1.75%, and telling him he was "as usual, 'too late.'"
The greenback held steady at 0.7906 Swiss franc, after dipping as low as 0.7873 franc in the previous session.
The euro was flat at $1.1802, sticking close to the overnight peak of $1.1829.
Sterling edged up slightly to $1.37435, approaching Tuesday's high of $1.3787, a level last seen in October 2021.
The dollar made up a little ground against the yen, adding 0.1% to 143.59 yen, following the prior session's 0.4% slide. (Reporting by Kevin Buckland Editing by Shri Navaratnam)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Tahawul Tech
an hour ago
- Tahawul Tech
HPE buys Juniper Networks for $14 billion
Hewlett Packard Enterprise (HPE) has closed a deal to buy Juniper Networks for $14 billion, after the US Department of Justice (DoJ) recently granted approval, effectively doubling the size of its networking business. In a briefing, HPE president and CEO Antonio Neri and former Juniper Networks CEO Rami Rahim provided colour on integration efforts and the possible future impact of the combined entity. The combination positions HPE to capture more of the growing AI and hybrid cloud market by creating a cloud-native and AI-driven IT portfolio including a full, modern networking stack. The company will reach large adjacent markets including data centres, firewalls and routers. 'We will have an organisation that integrates at the functional level and obviously at the business unit level, which obviously has the engineering, the product management, all the typical type of activities', Neri said. 'And at the corporate function level, the Juniper team will be integrated inside the HPE corporate structure'. The plan is to offer a full networking stack which includes hardware, silicon, the operation system, software and services, AI for networks and vice-versa. 'We're not just building a stronger company. We are establishing an industry powerhouse with vision, scale and innovation to define and lead the future, one that will serve our customers and partners better than ever,' Neri explained. Rahim is now the president and GM of the combined networking business, which includes HPE Networking, HPE Juniper Networking and HPE Aruba Networking. 'My objective here as the leader of this combined networking business is to build the best networking business really on the planet, one that's founded in innovation. And we plan on doing this first by starting to focus on our customers and partners'. Rahim is 'rolling up my sleeves' and 'starting on a customer and market focused, thoughtful integration strategy'. 'We're starting now via true north, which is around secure, AI-native and cloud-native networking'. Rahim and Neri emphasised no customers would be left behind as the combined entity moves forward. DoJ concessions The executives firmly denied concessions made to the DoJ to get the deal approved would have any impact on the competitiveness of the new entity. One of those conditions includes HPE licensing Juniper's AI Ops for Mist source code used in WLAN systems through an auction process. Neri said the code IP would remain with HPE, which will continue to support it. 'As it pertains to Mist, this is a licensing, this is not a divestiture'. Rahim said the Mist team would continue to innovate as part of HPE, with work accelerating due to a combination with HPE Aruba Networking. The DoJ also required HPE to sell its Aruba Instant On WLAN (WLAN) campus and branch network switching business, including all assets, IP, R&D personnel and customer relationships. Neri said the business had been built over the past three years and is 'completely separate from the rest of the traditional HPE Aruba platform or Aruba Central'. The unit targets SMBs and is 'a very small business for us'. Rahim stated the combination of the companies' WLAN portfolios would pose a new challenge for Cisco, pointing to a comprehensive 'secure, AI-native client-to-cloud portfolio for networking products'. Neri believes the company faces competition from about seven US companies with more rivals overseas. 'I think this combination will create more competition and more innovation'. Neri said HPE integrated its channel partner programmes last week at its HPE Discover conference. 'So now HPE has one comprehensive channel programme, which includes all aspects of our business. And then over time, we're going to integrate the Juniper channel programme to be able to sell the entire portfolio because obviously we want to make sure that they [customers] take advantage of everything the new networking business has to offer.' Source: Mobile World Live Image Credit: HPE & Juniper Networks
Zawya
an hour ago
- Zawya
J.P.Morgan wary of stablecoin's trillion-dollar growth bets, cuts them by half
on Thursday forecast stablecoin growth will only reach $500 billion by 2028, calling trillion-dollar projections "far too optimistic", as there was little evidence of mainstream adoption of the dollar-pegged cryptocurrency token. Stablecoins have moved beyond their crypto trading roots to attract interest from fintechs and banks aiming to speed up payments and settlements, drawing attention from U.S. lawmakers, who last month passed the GENIUS Act in the Senate - a step analysts said could bring long-awaited regulatory clarity. Before the Senate passed the stablecoin bill, Standard Chartered projected the market could reach $2 trillion by 2028, while Bernstein forecast in a June 30 note that supply would grow to about $4 trillion over the next decade. But said payments adoption of stablecoins remains minimal, accounting for just 6% of demand, or about $15 billion. It estimated the stablecoin market at $250 billion, with most usage concentrated in crypto trading, decentralized finance and collateral. "The idea that stablecoins will replace traditional money for everyday use is still far from reality," the brokerage said. Stablecoin adoption beyond crypto markets faces hurdles from limited use cases and fragmented regulation, while international uptake remains limited as most countries focus on their own digital currencies or strengthening existing payment systems. In June, the head of China's central bank pledged to expand the international use of the digital yuan or e-CNY. Ant Group, an affiliate of e-commerce giant Alibaba, said it plans to apply for a license to issue stablecoins in Hong Kong through its overseas arm Ant International, which operates mobile payment app Alipay. "Neither the rapid expansion of e-CNY nor the success of Alipay and WeChat Pay represent templates for stablecoin expansion in the future," said. (Reporting by Rashika Singh, Siddarth S and Manya Saini in Bengaluru; Editing by Arun Koyyur)
Zawya
an hour ago
- Zawya
Republicans muscle Trump's sweeping tax-cut and spending bill through Congress
WASHINGTON - The 218-214 vote amounts to a significant victory for the Republican president that will fund his immigration crackdown, make his 2017 tax cuts permanent and deliver new tax breaks that he promised during his 2024 campaign. It also cuts health and food safety net programs and zeroes out dozens of green energy incentives. It would add $3.4 trillion to the nation's $36.2 trillion debt, according to the nonpartisan Congressional Budget Office. Despite concerns within Trump's party over the 869-page bill's price tag and its hit to healthcare programs, in the end just two of the House's 220 Republicans voting against it, following an overnight standoff. The bill has already cleared the Republican-controlled Senate by the narrowest possible margin. The White House said Trump will sign it into law at 5 p.m. ET (2100 GMT) on Friday, the July 4 Independence Day holiday. Republicans said the legislation will lower taxes for Americans across the income spectrum and spur economic growth. "This is jet fuel for the economy, and all boats are going to rise," House Speaker Mike Johnson said. Every Democrat in Congress voted against it, blasting the bill as a giveaway to the wealthy that would leave millions uninsured. "The focus of this bill, the justification for all of the cuts that will hurt everyday Americans, is to provide massive tax breaks for billionaires," House Democratic Leader Hakeem Jeffries said in an eight-hour, 46-minute speech that was the longest in the chamber's history. Trump kept up the pressure throughout, cajoling and threatening lawmakers as he pressed them to finish the job. "FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE. RIDICULOUS!!!" he wrote on social media. Though roughly a dozen House Republicans threatened to vote against the bill, only two ended up doing so: Brian Fitzpatrick of Pennsylvania, a centrist, and Thomas Massie of Kentucky, a conservative who said it did not cut spending enough. MARATHON WEEKEND Republicans raced to meet Trump's July 4 deadline, working through last weekend and holding all-night debates in the House and the Senate. The bill passed the Senate on Tuesday in a 51-50 vote in that saw Vice President JD Vance cast the tiebreaking vote. According to the CBO, the bill would lower tax revenues by $4.5 trillion over 10 years and cut spending by $1.1 trillion. Those spending cuts largely come from Medicaid, the health program that covers 71 million low-income Americans. The bill would tighten enrollment standards, institute a work requirement and clamp down on a funding mechanism used by states to boost federal payments - changes that would leave nearly 12 million people uninsured, according to the CBO. Republicans added $50 billion for rural health providers to address concerns that those cutbacks would force them out of business. Nonpartisan analysts have found that the wealthiest Americans would see the biggest benefits from the bill, while lower-income people would effectively see their incomes drop as the safety-net cuts would outweigh their tax cuts. The increased debt load created by the bill would also effectively transfer money from younger to older generations, analysts say. Ratings firm Moody's downgraded U.S. debt in May, citing the mounting debt, and some foreign investors say the bill is making U.S. Treasury bonds less attractive. The bill raises the U.S. debt ceiling by $5 trillion, averting the prospect of a default in the short term. But some investors worry the debt overhang could curtail the economic stimulus in the bill and create a long-term risk of higher borrowing costs. On the other side of the ledger, the bill staves off tax increases that were due to hit most Americans at the end of this year, when Trump's 2017 individual and business tax cuts were due to expire. Those cuts are now made permanent, while tax breaks for parents and businesses are expanded. The bill also sets up new tax breaks for tipped income, overtime pay, seniors and auto loans, fulfilling Trump campaign promises. The final version of the bill includes more substantial tax cuts and more aggressive healthcare cuts than an initial version that passed the House in May. During deliberations in the Senate, Republicans also dropped a provision that would have banned state-level regulations on artificial intelligence, and a "retaliatory tax" on foreign investment that had spurred alarm on Wall Street. The bill is likely to feature prominently in the 2026 midterm elections, when Democrats hope to recapture at least one chamber of Congress. Republican leaders contend the bill's tax breaks will goose the economy before then, and many of its benefit cuts are not scheduled to kick in until after that election. Opinion polls show many Americans are concerned about the bill's cost and its effect on lower income people. (Reporting by Bo Erickson, Richard Cowan and David Morgan Additional reporting by Andrea Shalal and Jasper Ward Writing by Andy Sullivan Editing by Scott Malone, and Alistair Bell)
