Dollar set for weekly gain as firm US data tempers Fed easing bets
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
The dollar headed for a second straight weekly gain against major peers, buoyed by some solid U.S. economic data that supported the view the Federal Reserve can afford to wait a while longer before cutting interest rates again.The yen remained on the back foot heading into upper house elections on Sunday in Japan, with polls suggesting the ruling coalition is at risk of losing its majority - a development that would stir policy uncertainty and complicate tariff negotiations with the U.S.Bitcoin hovered just below $120,000, after this week pushing to an all-time peak of $123,153.22, with Congress passing a bill to create the framework for dollar-pegged stablecoins.The dollar index, which measures the currency against six leading counterparts, held steady at 98.456 as of 0038 GMT, keeping it on track for a 0.64% weekly advance and building on the previous week's 0.91% rally.The dollar index climbed as high as 98.951 on Thursday for the first time since June 23 after U.S. data showed retail sales rebounded more than expected in June and first-time applications for unemployment benefits dropped to a three-month low last week.Earlier in the week, a report showed consumer prices increased by the most in five months in June, suggesting tariffs were starting to have an impact on inflation.Traders currently price about 45 basis points of rate cuts for the remainder of the year, down from closer to 50 basis points at the start of the week.At the same time, the dollar index remains 9.3% lower over the course of this year, following a steep selloff in March and April when President Donald Trump's erratic trade policies undermined confidence in U.S. assets, sending the currency, Treasury bonds and Wall Street all lower.Clouds of uncertainty still hang over the dollar though, which has been shaken in recent days and weeks by fiscal worries from Trump's massive spending and tax cut bill, as well as the U.S. President's relentless criticism of Federal Reserve Chair Jerome Powell for not cutting rates."The USD remains vulnerable to the downside if concerns about U.S. policymaking further undermine investor confidence in USD assets," Commonwealth Bank of Australia analysts wrote in a client note.The U.S. currency's drop earlier this week on speculation Trump was aiming to oust Powell "was a case in point," the analysts said.The dollar tumbled on Wednesday on a Bloomberg report that Trump was planning to fire Powell soon, before paring losses when Trump denied the news.Trump has said repeatedly that interest rates should be at 1% or lower, compared with the current 4.25%-4.5% range.The dollar was steady at 148.60 yen, hovering not far from the 3-1/2-month high of 149.19 from Wednesday, as signs grew that Japan's coalition would fall short of retaining its majority, potentially giving more sway to opposition parties that back consumption tax cuts to ease the burden on voters from rising prices. For the week, the dollar has gained 0.73% on the Japanese currency.Japan, which initially was touted by the White House as likely to be among the first to reach a trade deal, has been deadlocked with Washington over politically sensitive issues of car and agriculture tariffs.Japan's top trade negotiator, Ryosei Akazawa, held talks with U.S. Commerce Secretary Howard Lutnick on Thursday, as Tokyo races to avert a damaging 25% levy that would become effective after the August 1 deadline.The euro rose 0.25% to $1.1626, clawing its way off Thursday's three-week low of $1.1556. For the week, the euro is down 0.59%.Sterling rose 0.13% to $1.3436, slightly paring its weekly decline to 0.41%.Bitcoin edged up 0.35% to around $119,899 on the day.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
20 minutes ago
- Indian Express
Japan's US dilemma
Written by Vanshika Saraf In the space of a few weeks, Japan has found itself at the centre of a geopolitical storm. On the one hand is a jarring economic fallout with its most important ally, the United States, and on the other, a major recalibration of its defence orientation. Japan plans to deploy long-range missiles on its southwestern islands by 2026, a historic departure from its post-war pacifist posture. Simultaneously, the reimposition of tariffs on Japanese automobile and steel exports by the Trump administration has raised profound concerns in Tokyo about the stability and reciprocity of its alliance with Washington. This unfolding tension illustrates a paradox. Japan is rearming to secure American support while facing an economic squeeze from that very ally. For India, this emerging contradiction presents a critical moment of opportunity and responsibility. The opportunity lies in Tokyo's growing willingness to diversify its strategic and economic relationships. The responsibility stems from the fact that the health of the US-Japan relationship is integral for the Quad to succeed. In 2024, Japan unveiled its largest defence budget, as part of a broader plan to double spending by 2027. It now plans to deploy long-range cruise missiles, capable of striking military bases in China or North Korea, to strengthen deterrence capabilities amid rising tensions in the East China Sea. Late last month, it also carried out its first-ever missile test on domestic soil at the Shizunai Anti-Air Firing Range. But such assertiveness comes with challenges. Domestically, Japan's pacifist constitution and fiscal constraints limit the extent of militarisation. Public opinion remains cautious, and defence spending, even under current commitments, barely crosses 2 per cent of GDP. More importantly, Japan's defence upgrades are premised on continued US military backing, including interoperability, intelligence sharing, and nuclear deterrence cover. However, the reliability of that cover is now in question. The second Trump administration's protectionist outlook has resurfaced longstanding doubts in Tokyo about the durability of the alliance. As the US demands more from its allies while offering diminishing assurances, Japan's dependency on a single power is beginning to look untenable. The imposition of tariffs on Japanese automobiles and steel products by Washington has reopened old wounds. These sectors are core to Japan's export economy and national innovation ecosystem. It signals that security alliances no longer guarantee economic goodwill. Moreover, Japan's vulnerability to trade coercion is not limited to the US. China's increasing use of informal embargoes, on semiconductors, rare earths, and tourism, means that Tokyo now finds itself squeezed between its top two trading partners, neither of whom are fully reliable. This economic dilemma has spurred internal calls, particularly from opposition parties, for Japan to diversify its trade architecture and reduce reliance on the US market. In this recalibration, India features as a natural partner. First, defence and technology cooperation between India and Japan should move beyond joint exercises like JIMEX and Malabar to co-production and co-development. Joint R&D in unmanned systems, electronic warfare, and hypersonic are areas where both countries lag compared to China and the US. A co-production deal on missile components and air defence systems will also reduce reliance on Western original equipment manufacturers. Second, economic collaboration must be re-energised. The India-Japan Comprehensive Economic Partnership Agreement (CEPA), which came into effect in 2011, has not undergone a formal revision despite several rounds of discussion and joint reviews. India should accelerate the upgradation of the CEPA to include new elements like digital trade, e-commerce, fintech and mutual recognition of standards. Finally, New Delhi and Tokyo must ensure that their newly institutionalised economic security dialogue continues to be a regular annual affair. Focusing on the weaponisation of trade, supply chain resilience, and financial sanctions, the first round of the India-Japan Dialogue on Economic Security, Strategic Trade and Technology took place in November 2024. As both countries face the ripple effects of the US-China rivalry, they need coordinated strategies to defend their economic sovereignty. Prime Minister Ishiba is under pressure to deliver a precarious US–Japan trade deal by August 1 or face 25 per cent U.S. tariffs. Before that, on July 20, Japan will head to the polls for a crucial Upper House election. The ruling LDP–Komeito coalition currently commands the upper house, but polls suggest they could lose their majority. 124 of 248 seats are at stake, with the coalition needing to secure 50 seats to maintain its majority. Recent NHK surveys show the LDP's support is at 24 per cent, its lowest since 2012, while populist parties like Sanseito are gaining ground. Although losing the upper house would not mean an immediate change in government, it could mean crippled governance, creating the prospect of legislative deadlocks. Tokyo is clearly entering a new phase of geopolitical agency. It is no longer shielded from the turbulence shaping global politics. The country is being pushed slowly from the comfort zone of technocratic governance and soft balancing into a harsher landscape. For decades, Japan has served as a quiet anchor of regional order, but that paradigm is increasingly under strain. A deeper, more symmetrical India-Japan partnership could serve as a stabilising force in the Indo-Pacific. The writer is a Research Analyst for the Indo-Pacific Studies Program at the Takshashila Institution
Mint
27 minutes ago
- Mint
TACO debate: Trump's tariff disruptions seem unlikely to damage the US economy this year
Next Story Thomas Black The US President has 'chickened out' of harsh tariffs before. Even if he doesn't back off from his August levies, US retailers have already negotiated burden sharing with Chinese suppliers. Whatever tariff surprises Donald Trump springs won't show up until next year. Trump's repeated tariff tweaks and pull backs have earned him the moniker of TACO—Trump Always Chickens Out. Gift this article While disruptive, the tariffs that President Donald Trump has been glibly tossing out, including new ones last week, haven't yet produced the widespread damage to the economy that many had predicted. While disruptive, the tariffs that President Donald Trump has been glibly tossing out, including new ones last week, haven't yet produced the widespread damage to the economy that many had predicted. In large part that's because Trump has tweaked and pulled back enough on them to prevent a catastrophe. This has earned him the moniker of TACO—Trump Always Chickens Out—but this is a bit misplaced because the tariffs are real and the money flowing in from these duties is large—to the tune of $26.6 billion in June compared with $6.3 billion in the month a year earlier. Even after calling a truce on the 145% tariffs on Chinese goods until August, the import duties on those products averaged 55%, according to the Port of Los Angeles. Maybe a few years ago the thought of such high tariffs on the US's largest trade partner would have been a recipe for shipping chaos, skyrocketing prices, empty shelves and ruined year-end holidays. The supply chain—the thermometer for health of global trade—reflected the tariff-induced whiplash when import volume plummeted in May and then recovered in June. Still, ocean container imports have continued strong in July as retailers prepare for both the back-to-school and holiday seasons. It may be surprising that even with the tariff volatility, the transport industry will have its first relatively normal peak season since before the pandemic—although it will be absent any big shipping rate increases. Remember, last year's peak was marred by the closing of the Suez Canal route because of Houthi rockets and the threat of a US East Coast port worker strike that precipitated an earlier-than-usual shipping season. Those events drove up ocean carrier rates. The big question this year is how much of the tariffs will be absorbed along the supply chain—manufacturers, distributors, retailers and consumers—and how the higher-priced goods will impact consumer demand. Unlike during the pandemic, when widespread inflation accelerated after a demand surge overwhelmed the supply chain and production capacity, the higher prices this time should be isolated to imported goods and more specifically those from China. There's anecdotal evidence that a lot of the tariff pain is being absorbed, while some will filter through to the consumer. After movements of ocean cargo plummeted in May during the quasi-embargo on China, imported goods rebounded in June and continue strong in July. US retailers put in their orders to Chinese factories (and if they haven't by now, it's too late) and negotiated on sharing the tariff bite. There was no surge of front-loading. That happened earlier this year before Trump's tariffs took effect. Following the truce, ocean shipping rates spiked above $5,000 per 40-foot container on the benchmark Shanghai-Los Angeles route for two weeks before settling down to less than $3,000. This steady stream of products shows that Trump pulled back from the May virtual embargo on Chinese imports just in time to save both back-to-school and Christmas shopping. No doubt he was urged on by the largest retailers, which were alarmed at the prospect of empty shelves in the fall and in December and lobbied hard for a truce. The uncertainty still lingers on what will happen to tariffs after the August deadlines with China and other countries. But any consequences from a breakdown of negotiations and potentially higher tariffs won't reach US consumers until well into next year. Also Read: Dani Rodrik: How ideology sometimes trumps material interests By the end of August, retailers will have their goods either in a warehouse or on a ship heading to the US. As in a typical peak season, trucks will be more active in the August-to-October period to take goods to stores. Then in November and December, the parcel carriers get busy. January is the month for retailers to process returns and hold clearance sales. The end of February next year will be Chinese New Year, a period when many factories shut down. This January-to-March transportation lull is called the quiet period. This means that whatever additional pain Trump decides to inflict with tariffs after the August deadlines won't really impact consumers until March of next year or afterward. While the shipping patterns will return to a more normal peak season this year, that doesn't mean the shopping experience will be unfazed. To cope with the extra cost of tariffs, retailers and distributors are reducing the variety of items they import and are concentrating on the most profitable products to protect margins. Anecdotal evidence suggests that the tariff bite is being shared along the chain. You can bet that if consumers begin to balk at higher prices, retailers will adjust to make the sale. Bobby Djavaheri, president of Yedi Housewares, is coping with a worst-case tariff exposure because China is the sole source for small kitchen appliances and dinnerware that the company sells to large retailers. Djavaheri said Yedi is raising prices by 10%—a fraction of the current tariff level. 'It's simply impossible to pass on all of it because folks aren't going [to] buy the product," Djavaheri said on Monday during a press conference with Gene Seroka, executive director of the Port of Los Angeles. Store shelves could get bare this Christmas shopping season if demand is strong because retailers are erring on understocking instead of overstocking and limiting the number of items for sale. In these times of tariffs, that would be the better problem to have than an excess of expensive merchandise. Consumers aren't likely to be in the mood for buying sprees with all the uncertainty swirling around tariffs, jobs, inflation and interest rates. When Trump's August deal deadlines hit, there are three likely outcomes: Trump goes TACO and pushes back deadlines again; Trump goes nuclear and boosts tariffs; Trump gets deals done. It could be a combination of all three. No matter the path, the impacts won't really be felt by consumers until next year. ©Bloomberg The author is a Bloomberg Opinion columnist writing about the industrial and transportation sectors Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
NDTV
37 minutes ago
- NDTV
Trump Wants Coca-Cola To Use Cane Sugar In Sodas, But Consumers Want...
The debate over whether Coca-Cola should use high-fructose corn syrup or cane sugar in its signature soda obscures an important fact: Consumers are increasingly looking for Coke with no sugar at all. Coca-Cola Zero Sugar, which was introduced in 2017, uses both the artificial sweetener aspartame and the natural sweetener stevia in its recipe. It's one of Coke's fastest-growing products, with global case volumes up 14% in the first quarter of the year. By comparison, the company's total case volumes were up 2%. PepsiCo also noted Thursday that 60% of its sales volumes in major markets in the second quarter came from low- or no-sugar drinks. 'When you look at colas, the percentage of growth coming from zero sugar is significant,' said Duane Stanford, the editor and publisher of Beverage Digest. The scrutiny over Coke's sweeteners began Wednesday, when President Donald Trump announced that Atlanta-based Coca-Cola Co. had agreed to switch to using cane sugar in the regular version of its beverage manufactured in the US. 'I have been speaking to Coca-Cola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so,' Trump wrote on his social media site. 'I'd like to thank all of those in authority at Coca-Cola. This will be a very good move by them — You'll see. It's just better!' "I have been speaking to @CocaCola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so. I'd like to thank all of those in authority at Coca-Cola. This will be a very good move by them — You'll see. It's just better!" –President Donald J. Trump — The White House (@WhiteHouse) July 16, 2025 Coca-Cola didn't confirm the change. In a statement, the company said it appreciated Trump's enthusiasm and would share details on new offerings soon. Stanford said he doubts Coca-Cola will fully shift away from high fructose corn syrup, which has sweetened Coke in the US since the 1980s. There would be tremendous supply chain and logistics headaches, he said, and the US doesn't make enough sugar for Coke's needs. He expects the Atlanta-based company will offer a cane sugar-sweetened version in the US just like its rival Pepsi has been doing since 2009. He noted that Coke has indulged US fans by importing Mexican Coke, which is made with cane sugar, since 2005. Coke positions Mexican Coke as an upscale alternative and sells it in glass bottles. The corn industry wasn't happy with the speculation. In a statement Wednesday, Corn Refiners Association President and CEO John Bode said replacing high fructose corn syrup with cane sugar makes no sense and would cost thousands of American manufacturing jobs. Shares in ADM, a maker of high fructose corn syrup, dipped nearly 2% Thursday after Trump's announcement. In a message on X, Coca-Cola defended high fructose corn syrup, saying it's no more likely to contribute to obesity than table sugar or other full-calorie sweeteners. 'It's safe; it has about the same number of calories per serving as table sugar and is metabolized in a similar way by your body,' the company said. 'Please be assured that Coca-Cola brand soft drinks do not contain any harmful substances.' The Food and Drug Administration also says there is no evidence of any difference in safety among foods sweetened with high fructose corn syrup and those that sugar, honey or other traditional sweeteners. Soft drink preferences are highly subjective, as anyone who has been in a Pepsi vs Coke or 7-Up vs. Sprite debate knows. But recent trends indicate that Coke and other drink makers need to focus on the kinds of low- and no-sugar drinks that a growing number of consumers are seeking, according to Stanford. He said his data shows original Coke was the top seller by volume in the US last year, with 19% market share, while Coke Zero Sugar was seventh and had a 4% market share. But Coke Zero Sugar's share grew 10%, while original Coke's share was flat. Paige Leyden, the associate director of food service, flavors and ingredients reports at the market research company Mintel, said drinks with a health halo like Olipop — which has 1 gram of sugars compared to original Coke's 65 grams — are also pressuring legacy soda makers. Mintel expects full-sugar sodas will see a 3.4% rise in US sales this year, while diet sodas will see 11.8% growth. Still, nutritionists suggest avoiding added sugars, no matter the form, since they provide empty calories with no nutrients. The 2020 US dietary guidelines advise people to limit foods and beverages higher in added sugars, and say children under 2 should not be fed them at all. Health Secretary Robert F Kennedy, whose nutrition views often diverge from mainstream nutrition science, has spoken out against sugar. His agency is expected to release updated nutrition guidelines later this year. 'There's things we'll never be able to eliminate, like sugar,' Kennedy said at an April news conference. 'And sugar is poison, and Americans need to know that.' Aspartame and other artificial sweeteners are also named as a concern in a government report Kennedy issued in May.
