Latest news with #BloombergDollarSpotIndex
Mint
a day ago
- Business
- Mint
Gold Heads for Weekly Loss as Trade Talks Help Ease Haven Demand
(Bloomberg) -- Gold headed for its second straight weekly loss as progress on global trade talks and rising US consumer sentiment helped reduce the appeal for the safe-haven asset. US consumer sentiment rose sharply in June to a four-month high and inflation expectations improved notably as concerns eased about the economic outlook and personal finances. Meanwhile, the European Union and the US are confident they can clinch some form of a trade agreement before a July 9 deadline, while China confirmed details of a trade framework with Washington. Progress on the trade front helped improve investor sentiment for risk assets such as equities while sapping haven demand for gold. The precious metal fell by as much as 2.2% to $3,255.94 an ounce on Friday, the lowest intraday level since May 29. Shares of precious metals miners also fell, with Agnico Eagle Mines Ltd. down as much as 5.9% and Anglogold Ashanti Plc falling 6.3%. Bullion remains up nearly 25% this year and is more than $220 away from its record high reached in April. Along with geopolitical and trade tensions, it has been supported by robust central-bank buying and increased optimism that the Federal Reserve is preparing to resume monetary easing. Platinum plunged as much as 6.8% Friday, erasing some of the gains the white metal has seen this week. Prices have been volatile in recent months, hitting the highest level in more than a decade on Thursday, as the London and Zurich spot market grapples with tight availability, evidenced by forward prices trading well below spot. Gold was down 1.6% to $3,274.83 as of 11:57 a.m. in New York, on pace for a weekly loss of 2.8%. The Bloomberg Dollar Spot Index was little changed. Silver also fell while palladium was flat. More stories like this are available on
Time of India
2 days ago
- Business
- Time of India
Euro set for best run since 2017 as $ slumps
The euro is set for its longest stretch of monthly gains in eight years, boosted by rising confidence in Europe's economic prospects and a hunt for alternatives to the slumping dollar. The currency is up more than 3% in June, its sixth month of advances. Those gains have come as the dollar falters, with the Bloomberg Dollar Spot Index near its lowest level in more than three years after again dipping this week. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Yahoo
3 days ago
- Business
- Yahoo
Euro Poised for Best Run Since 2017 as Dollar's Slump Picks Up
(Bloomberg) -- The euro is set for its longest stretch of monthly gains in eight years, boosted by rising confidence in Europe's economic prospects and a hunt for alternatives to the slumping dollar. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Mapping the Architectural History of New York's Chinatown US State Budget Wounds Intensify From Trump, DOGE Policy Shifts The common currency is up more than 3% in June, its sixth month of advances. It climbed to $1.1753 on Friday, the highest level since September 2021. Those gains have come as the dollar falters, with the Bloomberg Dollar Spot Index near its lowest level in more than three years after again dipping this week. The currencies are moving in separate directions on wagers that the Federal Reserve will cut rates at least two times this year while the European Central Bank is coming to the end of its easing run. Money markets are pricing in about 60 basis points of Fed easing by year-end, compared with just 25 basis points from the European Central Bank, and currencies tend to benefit from higher rates. Adding to the outlook for the dollar is speculation the next Fed chair will heed President Donald Trump's calls for aggressive rate cuts. Helen Given, a foreign-exchange trader at Monex Inc., sees the index declining by as much as 9% if Trump names a dovish successor to Jerome Powell this year. It's already down nearly 9% year to date, after declining 1.4% this week. 'The fortunes of the macro US economy for the back half of this year don't look so great,' she said, citing recent data, including a weak reading on gross domestic product. Fed Path The opposing outlooks for the euro and dollar show how currency traders are returning their focus to the Fed's path on rate cuts following a bout of geopolitical risks in the Middle East and worries over the impact of trade tariffs. 'The fleeting support for the greenback, born of geopolitical tensions and its traditional safe-haven appeal, has all but evaporated,' said Antonio Ruggiero, strategist at foreign exchange and global payments firm Convera. 'The euro will continue to benefit from persistent dollar pessimism.' European policymakers have called for steps to boost the euro's global standing amid the shifting landscape. Meanwhile, risk reversals on the dollar index have once again turned negative across the curve, pricing a weaker greenback going forward. A group of non-commercial traders, including asset managers and other speculators, boosted their bets against the dollar in the week through June 17, according to the Commodity Futures Trading Commission's report on Monday. They are now the most bearish on the greenback since August 2023. 'US interest rates can decline more quickly in coming months than in much of the rest of G-10,' wrote strategists at UBS Investment, explaining that it will weigh on the greenback and propel the euro and the yen. They forecast the common currency will reach $1.23 and the yen to trade at 130 per US dollar by year end. The euro is among the best performers against the dollar this year so far, advancing about 13%. Asset managers are the most bullish on the common currency since early 2024, CFTC reported. What Bloomberg Strategists Say... 'European currencies are best placed to transform the dollar's weakness into strength given that the Bank of Japan is dragging its feet on further policy tightening. Even so, the euro's journey higher will be far from linear.' — Ven Ram, Markets Live strategist. Click here for the full piece. On Friday, a report showed that US consumer spending declined in May by the most since the start of the year. The Fed's preferred inflation gauge — the core PCE price index — rose 0.2% on a monthly basis, slightly more than expected. 'Higher PCE readings and weaker personal spending feeds into the stagflation story,' said Win Thin, global head of markets strategy at Brown Brothers Harriman & Co. 'Not a good combo for the dollar.' --With assistance from Mark Cranfield and George Lei. (Recasts with dollar pricing.) America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Apple Test-Drives Big-Screen Movie Strategy With F1 Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
6 days ago
- Business
- Mint
A Key Gauge Signals Waning Demand for US Dollar in $7.5 Trillion Market
A measure of demand in the $7.5-trillion-a-day foreign-exchange market is catching the attention of Wall Street, pointing to diminished appetite for the US dollar even during market turbulence that would otherwise send investors flocking to the greenback. Analysts at a handful of banks including Morgan Stanley and Goldman Sachs Group Inc. all point to recent shifts in so-called cross-currency basis swaps — a gauge of how much it costs to exchange one currency for another beyond what would normally be implied by borrowing costs in the cash markets. As demand for a particular currency increases, that extra cost or premium rises, and likewise declines or even can go negative when appetite isn't as strong. These analysts note that when markets melted down in April following US President Donald Trump's 'Liberation Day' tariff announcement, the preference for dollars as measured by basis swaps was relatively minor and short-lived. Meanwhile, demand for other currencies such as the euro and yen has grown. That stands in sharp contrast to previous scrambles for safety over the last two decades, such as the onset of the pandemic, which saw the dollar command a premium in global funding markets for a sustained period. Over time, this waning preference for dollar liquidity, particularly relative to the euro, could ultimately make it more expensive to borrow Europe's common currency relative to the greenback — presenting a challenge for the US currency at a time when its preeminent position in world finance is facing growing doubts. 'Recent cross-currency basis movements suggest investors have less appetite to buy dollar-denominated assets and more appetite to buy those denominated in euro and yen,' the Morgan Stanley team including Koichi Sugisak and Francesco Grechi wrote in a June report. In fact, the US tariff impact appeared to be 'triggering a temporary withdrawal from dollar assets,' the Morgan Stanley analysts wrote. The cross-currency basis matters because it effectively sets the price of long-term, foreign-exchange hedging for companies and investors the world over. It's also an indication of the shifting trends in vast flows of assets between economies and asset classes. Already, the Bloomberg Dollar Spot Index is down more than 8% this year — the measure's worst start to a year since the gauge launched two decades ago. The focus on basis swaps comes at a time of a broader questioning of the US currency's role as a haven, against a backdrop of both policy uncertainty associated with the Trump administration as well as the nation's fiscal outlook in the years ahead. Of course, geopolitical risks still abound that show persisting demand for dollar assets in times of stress. The dollar briefly touched a three-week high on Monday as oil prices climbed following the Israeli and US strikes on Iran; Treasuries have also rallied alongside other global debt amid the Middle East tensions. But the Wall Street analysts are more focused on enduring shifts in global capital flows over a longer time horizon. 'Generally the theme that's linked to the cross-currency basis is: Are investors, particularly in Europe, repatriating money from the US?' Guneet Dhingra, the head of US interest-rate strategy at BNP Paribas SA, said in an interview. 'Our view at BNP is that there is definitely a fair bit of cross-border flow, particularly from the US to Europe.' At Goldman Sachs, Simon Freycenet and Friedrich Schaper argued that the unwind of the European Central Bank's balance sheet will likely persist beyond the Federal Reserve's own quantitative tightening efforts. Combined with Europe's positive net international investment position — especially compared to the US, which is the world's major international debtor — these dynamics should support the tightening of euro funding relative to the dollar over time. 'The modest currency base moves in the wake of 'Liberation Day' are notable, likely also reflecting the absence of a dash for dollars amid a more resilient global financial system than before,' Freycenet and Schaper said. Goldman ultimately sees potential for the euro to become more expensive than the dollar in the cross-currency basis swap markets — a rare phenomenon over the last two decades. This article was generated from an automated news agency feed without modifications to text.
Yahoo
6 days ago
- Business
- Yahoo
A Key Gauge Signals Waning Demand for US Dollar in $7.5 Trillion Market
(Bloomberg) -- A measure of demand in the $7.5-trillion-a-day foreign-exchange market is catching the attention of Wall Street, pointing to diminished appetite for the US dollar even during market turbulence that would otherwise send investors flocking to the greenback. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Risk Lives in Johannesburg With Taxi Groups at War Analysts at a handful of banks including Morgan Stanley and Goldman Sachs Group Inc. all point to recent shifts in so-called cross-currency basis swaps — a gauge of how much it costs to exchange one currency for another beyond what would normally be implied by borrowing costs in the cash markets. As demand for a particular currency increases, that extra cost or premium rises, and likewise declines or even can go negative when appetite isn't as strong. These analysts note that when markets melted down in April following US President Donald Trump's 'Liberation Day' tariff announcement, the preference for dollars as measured by basis swaps was relatively minor and short-lived. Meanwhile, demand for other currencies such as the euro and yen has grown. That stands in sharp contrast to previous scrambles for safety over the last two decades, such as the onset of the pandemic, which saw the dollar command a premium in global funding markets for a sustained period. Over time, this waning preference for dollar liquidity, particularly relative to the euro, could ultimately make it more expensive to borrow Europe's common currency relative to the greenback — presenting a challenge for the US currency at a time when its preeminent position in world finance is facing growing doubts. 'Recent cross-currency basis movements suggest investors have less appetite to buy dollar-denominated assets and more appetite to buy those denominated in euro and yen,' the Morgan Stanley team including Koichi Sugisak and Francesco Grechi wrote in a June report. In fact, the US tariff impact appeared to be 'triggering a temporary withdrawal from dollar assets,' the Morgan Stanley analysts wrote. The cross-currency basis matters because it effectively sets the price of long-term, foreign-exchange hedging for companies and investors the world over. It's also an indication of the shifting trends in vast flows of assets between economies and asset classes. Already, the Bloomberg Dollar Spot Index is down more than 8% this year — the measure's worst start to a year since the gauge launched two decades ago. The focus on basis swaps comes at a time of a broader questioning of the US currency's role as a haven, against a backdrop of both policy uncertainty associated with the Trump administration as well as the nation's fiscal outlook in the years ahead. Of course, geopolitical risks still abound that show persisting demand for dollar assets in times of stress. The dollar briefly touched a three-week high on Monday as oil prices climbed following the Israeli and US strikes on Iran; Treasuries have also rallied alongside other global debt amid the Middle East tensions. But the Wall Street analysts are more focused on enduring shifts in global capital flows over a longer time horizon. 'Generally the theme that's linked to the cross-currency basis is: Are investors, particularly in Europe, repatriating money from the US?' Guneet Dhingra, the head of US interest-rate strategy at BNP Paribas SA, said in an interview. 'Our view at BNP is that there is definitely a fair bit of cross-border flow, particularly from the US to Europe.' At Goldman Sachs, Simon Freycenet and Friedrich Schaper argued that the unwind of the European Central Bank's balance sheet will likely persist beyond the Federal Reserve's own quantitative tightening efforts. Combined with Europe's positive net international investment position — especially compared to the US, which is the world's major international debtor — these dynamics should support the tightening of euro funding relative to the dollar over time. 'The modest currency base moves in the wake of 'Liberation Day' are notable, likely also reflecting the absence of a dash for dollars amid a more resilient global financial system than before,' Freycenet and Schaper said. Goldman ultimately sees potential for the euro to become more expensive than the dollar in the cross-currency basis swap markets — a rare phenomenon over the last two decades. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? What Mike Tyson and the Bond Market Can Teach Trump on Debt ©2025 Bloomberg L.P.
