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Zawya
37 minutes ago
- Zawya
Dollar slips versus major currencies as US tariff deadline looms
The dollar slipped against other major currencies on Friday after President Donald Trump got his signature tax cut bill over the final hurdle and pressure mounted on countries to secure trade deals with the United States. The U.S. currency had rallied on Thursday after stronger than expected U.S. jobs data pushed out the timing for potential rate cuts by the Federal Reserve. But the dollar index, which tracks the currency against major peers, is headed for a second-straight weekly decline. The Republican-controlled House of Representatives narrowly passed Trump's "One, Big, Beautiful Bill" of spending and tax cuts that is estimated to add $3.4 trillion to the country's $36.2 trillion debt. Trump is expected to sign the bill into law on Friday. With the U.S. 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 appetite for the dollar is waning because, one, the U.S. debt worries are rising and appetite for U.S. debt is at risk," said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank. "And also because of the fact that the tariff situation and trade disruptions are going to have a negative impact on growth for the U.S. and the Fed will not necessarily be able to support the economy when inflation risks are rising." The dollar index had its worst first half since 1973 as Trump's chaotic roll-out of sweeping tariffs heightened concerns about the U.S. economy and the safety of Treasuries. The U.S. currency has fallen more than 6% since April 2, which was when the U.S. announced tariffs on the world, and had hit the lowest in more than three years against the euro and British pound earlier in the week. The dollar index edged 0.1% lower to 96.92, trimming its 0.4% advance on Thursday. The euro added 0.2% to $1.178, poised for a 0.5% weekly gain. The yen climbed 0.4% to 144.32 versus the dollar, while the Swiss franc firmed 0.2% to fetch 0.793 per dollar. TRADE CONCERNS Trump said many countries will get letters on Friday specifying what tariff rates they will face, marking a shift from earlier pledges to do individual deals with trading partners. European Commission President Ursula von der Leyen said the EU was aiming for a trade agreement "in principle" with the U.S. before the deadline. Japan, which has been a focus of Trump's ire of late, is reportedly sending its chief trade negotiator to the U.S. again as early as this weekend. Indonesia offered to cut duties on key imports from the United States to "near zero" and to buy $500 million worth of U.S. wheat. Elsewhere, China said it would implement duties of up to 34.9% on brandy originating in the European Union for a period of five years starting from July 5. In some relief for investors worried about the health of the U.S. economy, the employment report on Thursday showed that non-farm payrolls increased by 147,000 jobs in June, well ahead of economists' forecast in a Reuters poll for a rise of 110,000. "The U.S. labour market is gradually slowing down, but the fact that it hasn't experienced a sudden change is reassuring," said SMBC chief currency strategist Hirofumi Suzuki. "I personally predict that the tariff negotiations will not be very favourable, leading to continued dollar weakness and yen strength." Market expectations that the Fed will leave rates unchanged at its July meeting are now at 95.3% probability, up from 76.2% on July 2, according to the CME's Fedwatch tool. Economists continue to expect the Fed will not start cutting rates again until September or even later. (Reporting by Rocky Swift and Johann M Cherian; Editing by Shri Navaratnam, Jane Merriman and Louise Heavens)
Zawya
38 minutes ago
- Zawya
Stocks and dollar dip as Trump's spending bill passes, trade deal deadline nears
Stocks slipped on Friday as U.S. President Donald Trump got his signature tax cut bill over the line and attention turned to his July 9 deadline for countries to secure trade deals with the world's biggest economy. The dollar also fell against major currencies with U.S. markets already shut for the holiday-shortened week, as traders considered the impact of Trump's sweeping spending bill which is expected to add an estimated $3.4 trillion to the national debt. The pan-European STOXX 600 index fell 0.8%, driven in part by losses on spirits makers such as Pernod Ricard and Remy Cointreau after China said it would impose duties of up to 34.9% on brandy from the European Union starting July 5. U.S. S&P 500 futures edged down 0.6%, following a 0.8% overnight advance for the cash index to a fresh all-time closing peak. Wall Street is closed on Friday for the Independence Day holiday. Trump said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on exports to the United States, a clear shift from earlier pledges to strike scores of individual deals before a July 9 deadline when tariffs could rise sharply. Investors are "now just waiting for July 9," said Tony Sycamore, an analyst at IG, with the market's lack of optimism for trade deals responsible for some of the equity weakness in export-reliant Asia, particularly Japan and South Korea. At the same time, investors cheered the surprisingly robust jobs report on Thursday, sending all three of the main U.S. equity indexes climbing in a shortened session. "The U.S. economy is holding together better than most people expected, which suggests to me that markets can easily continue to do better (from here)," Sycamore said. Following the close, the House narrowly approved Trump's signature, 869-page bill, which averts the near-term prospect of a U.S. government default but adds trillions to the national debt to fuel spending on border security and the military. TRADE THE KEY FOCUS IN ASIA Trump said he expected "a couple" more trade agreements after announcing a deal with Vietnam on Wednesday to add to framework agreements with China and Britain as the only successes so far. U.S. Treasury Secretary Scott Bessent said earlier this week that a deal with India is close. However, progress on agreements with Japan and South Korea, once touted by the White House as likely to be among the earliest to be announced, appears to have broken down. The U.S. dollar index had its worst first half since 1973 as Trump's chaotic roll-out of sweeping tariffs heightened concerns about the U.S. economy and the safety of Treasuries, but had rallied 0.4% on Thursday before retracing some of those gains on Friday. As of 1100 GMT it was down 0.1% at 96.96. The euro added 0.2% to $1.1773, while sterling held steady at $1.3662. The U.S. Treasury bond market is closed on Friday for the holiday, but 10-year yields rose 4.7 basis points (bps) to 4.34%, while the 2-year yield jumped 9.3 bps to 3.882%. Gold firmed 0.4% to $3,336 per ounce, on track for a weekly gain as investors again sought refuge in safe-haven assets due to concerns over the U.S.'s fiscal position and tariffs. Brent crude futures fell 64 cents to $68.17 a barrel, while U.S. West Texas Intermediate crude likewise dropped 64 cents to $66.35, as Iran reaffirmed its commitment to nuclear non-proliferation. (Reporting by Lawrence White in London and Kevin Buckland in Tokyo; Editing by Stephen Coates, Kim Coghill, Alexandra Hudson and Joe Bavier)
Gulf Business
2 hours ago
- Gulf Business
Trump's One Big Beautiful Bill explained
Image: Getty Images In July 2025, the US Congress enacted the sweeping One Big Beautiful Bill (OBBB): a landmark legislative overhaul combining permanent extensions of Trump-era tax cuts for individuals and businesses with major spending cuts to welfare programmes and a hefty increase in defense and border security outlays. The bill narrowly cleared its final hurdle in the House of Representatives, positioning it to become law following his signature on July 4. According to the add approximately $3.3–$ 3.4 trillion to federal deficits over the next decade and leave 11–12 million Americans without Medicaid coverage, a claim strongly disputed by the White House. 'President Trump's One Big, Beautiful Bill delivers on the commonsense agenda that nearly 80 million Americans voted for – the largest middle-class tax cut in history, permanent border security, massive military funding, and restoring fiscal sanity. The pro-growth policies within this historic legislation are going to fuel an economic boom like we've never seen before. President Trump looks forward to signing the One Big, Beautiful Bill into law to officially usher in the Golden Age of America,' the VICTORY: The One Big Beautiful Bill Passes U.S. Congress, Heads to President Trump's Desk 🇺🇸🎉 — The White House (@WhiteHouse) From a B2B perspective, this bill sends strong signals: a brighter corporate tax landscape and investment clarity, contrasted with harsh reductions in healthcare and social safety nets. It deliberately reshapes incentives in sectors like renewable energy, defense, manufacturing, and infrastructure, offering strategic opportunities for businesses and investors. With permanent 2017 tax cuts, expanded bonuses, and full 100% expensing, the bill aims to stimulate corporate investment. Yet it simultaneously reverses many climate-related credits, potentially chilling solar and wind projects . Defense and security sectors, by contrast, are set to benefit from a . Lost in the US-centric coverage, however, are ripple effects in the GCC region, from fiscal and investment flows to energy markets and defense partnerships. Gulf sovereign wealth funds with heavy US bond and equity exposure may see altered yields and investment valuations. A return to robust US fossil fuel production and weaker renewables support could benefit GCC oil exporters, even as geopolitical and military collaboration dynamics evolve. Sector-Wise Breakdown Tax & Corporate Sector Permanent tax cuts : Lowers corporate and individual tax rates, increases Business certainty : Enhanced planning through long-term tax predictability, including 100% Section 179 expensing. Trade & remittance levy : Introduces a 1% tax on remittances—raising potential issues for global fund flows . Healthcare & Welfare Drastic Medicaid/SNAP cuts : Deep reductions could strip about 10–11 million low-income Americans of benefits. Eligibility changes : Programmes now include stricter work mandates and state cost-sharing, potentially straining hospital systems. Defense & Border Security Defense boost : +$150 billion for military, including 'Golden Dome' missile defense, drones, and nuclear upgrades. Immigration enforcement : +$150 billion for border control, ICE expansion, detention capacity for up to 1 million deportees annually. Energy & Environment Clean energy rollback : Repeals IRA tax credits, halts renewables momentum, and favors fossil fuels, nuclear, and gas sectors . Energy dominance push : Positions US around nuclear and gas reliability; delays investment in solar and wind . Infrastructure & Tech ATC modernisation : . Spectrum & R&D incentives : 600 MHz spectrum auction planned by 2034; R&D expensing restored to spur innovation . Agriculture & Rural Support for rural hospitals : $50 billion allocated to support struggling healthcare systems in non-urban areas . Agricultural enhancements : Elevated crop insurance, price supports, and disaster relief totalling approximately $60 billion . GCC Impact Snapshot Sovereign wealth & portfolio returns: The tax cuts and increased US debt may drive higher bond yields, squeezing GCC external debt issuances. A new remittance tax could also slightly dent returns for GCC-based investors in the US. Energy market ripples: Rollbacks in clean energy tilt US fuel demands back to oil and gas, supporting GCC hydrocarbon export prices in the short to mid-term . Defense & security ties: Expanded US defense budgets open avenues for GCC collaboration on advanced military and border technologies. Investment climate: Tax clarity may attract more GCC foreign direct investment into US infrastructure and technology sectors, though uncertainty in welfare and fiscal policy might temper risk appetite. Trump's 'One Big Beautiful Bill' epitomises a high-stakes gamble: it locks in permanent tax relief and certainty for corporations and the wealthy, while significantly slashing social safety nets, primarily Medicaid, potentially leaving nearly 12 million Americans uninsured. Although fossil fuel industries benefit from revived incentives, the rollback of clean‑energy credits casts a shadow over green energy's momentum, even as targeted investments in technology, defense, and research & development open long‑term growth pathways, assuming fiscal discipline and stable global trade persist.
