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Canada News.Net
02-07-2025
- Business
- Canada News.Net
Dollar heads for worst half since 1970s as trade, debt loom
NEW YORK CITY, New York: The U.S. dollar continues to lose ground, weighed down by growing concerns over Washington's fiscal outlook and ongoing uncertainty around key trade negotiations. Investors continue to digest the implications of President Donald Trump's proposed tax and spending legislation, which faces hurdles in the House, even within the Republican party. The sweeping bill, with an estimated cost of US$3.3 trillion, has sparked fears of a sharply rising U.S. deficit. "You have a weak dollar due to a potentially large increase in our budget deficit, and you have continued uncertainty around these tariff deals," said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey. Treasury Secretary Scott Bessent has added more fuel to market uncertainty, warning that tariffs could rise sharply on July 9, even for nations currently negotiating in good faith. "Any potential extensions will be up to Trump," he said. He also noted that recent adjustments to a May deal with China had resolved issues around shipments of rare earths and magnets to the U.S. "We had this positive news from the EU for a little bit, and we had potential positive deals coming up, but then you had Trump doing a temporary about-face on Friday on Canada and so forth," Epstein said. Amid shifting headlines—from fiscal policy and tariff battles to Middle East tensions—Epstein summed up the market mood: "It's kind of rotating a game of musical chairs… once one thing passes and the other thing is focused on." The Bank for International Settlements recently warned that U.S. trade policies risk triggering global financial instability, reinforcing investor caution.
CNBC
01-07-2025
- Business
- CNBC
Dollar languishes against major peers as markets weigh trade deals, tax bill
The dollar languished against the euro and Swiss franc on Monday as markets weighed the prospect of a ballooning U.S. government deficit and the potential for trade deals with major trading partners. Senate Republicans will try to pass President Donald Trump's sweeping tax-cut and spending bill, despite divisions within the party about its expected $3.3 trillion hit to the nation's debt pile. The dollar was down 0.44% to 0.79475 against the Swiss franc. The euro was up 0.28% at $1.175450 against the dollar. The greenback was set to finish the month 3.4% down against the franc, while the euro was set to gain about 3.6% against the dollar. "You have a weak dollar due to a potentially large increase in our budget deficit, and you have continued uncertainty around these tariff deals," said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey. Treasury Secretary Scott Bessent said that countries could still face sharply higher tariffs on July 9 even if they are negotiating in good faith, adding that any potential extensions will be up to Trump. The U.S. and China had resolved issues around shipments of Chinese rare earth minerals and magnets to the United States, further modifying a May deal in Geneva, Bessent had said last week. "We had this positive news from the EU for a little bit and we had potential positive deals coming up, but then you had Trump doing a temporary about-face on Friday on Canada and so forth," Epstein said. The dollar was down 0.19% to 144.33 against the Japanese yen , on track to finish the month flat versus the Asian currency. Canada halted its plans to begin collecting a new digital services tax targeting U.S. technology firms just hours before it was due to start on Monday in a bid to advance stalled trade negotiations with Washington. The Canadian dollar strengthened against the U.S. currency on the session. It was set to notch its fifth straight month of gains against the greenback. The loonie was up 0.36% versus the greenback to C$1.36 per dollar. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.15% to 97.05, on track for its sixth straight month of losses. It is set to mark its worst half-year since the 1970s. "It's kind of rotating a game of musical chairs, whether it's the 'big beautiful bill', the trade deals, and then the Iran-Israel conflict. It's all like taking turns to be at center stage; once one thing passes and the other thing is focused on," Epstein said. Sterling weakened 0.12% to $1.3698. The Australian dollar strengthened 0.52% versus the greenback to $0.6563.
Business Recorder
01-07-2025
- Business
- Business Recorder
Dollar languishes against major peers
NEW YORK: The dollar languished against the euro and Swiss franc on Monday as markets weighed the prospect of a ballooning US government deficit and the potential for trade deals with major trading partners. Senate Republicans will try to pass President Donald Trump's sweeping tax-cut and spending bill, despite divisions within the party about its expected $3.3 trillion hit to the nation's debt pile. The dollar was down 0.44% to 0.79475 against the Swiss franc . The euro was up 0.28% at $1.175450 against the dollar. The greenback was set to finish the month 3.4% down against the franc, while the euro was set to gain about 3.6% against the dollar. 'You have a weak dollar due to a potentially large increase in our budget deficit, and you have continued uncertainty around these tariff deals,' said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey. Treasury Secretary Scott Bessent said that countries could still face sharply higher tariffs on July 9 even if they are negotiating in good faith, adding that any potential extensions will be up to Trump. The US and China had resolved issues around shipments of Chinese rare earth minerals and magnets to the United States, further modifying a May deal in Geneva, Bessent had said last week. 'We had this positive news from the EU for a little bit and we had potential positive deals coming up, but then you had Trump doing a temporary about-face on Friday on Canada and so forth,' Epstein said. The dollar was down 0.19% to 144.33 against the Japanese yen , on track to finish the month flat versus the Asian currency. Canada halted its plans to begin collecting a new digital services tax targeting US technology firms just hours before it was due to start on Monday in a bid to advance stalled trade negotiations with Washington. The Canadian dollar strengthened against the US currency on the session. It was set to notch its fifth straight month of gains against the greenback. The loonie was up 0.36% versus the greenback to C$1.36 per dollar. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.15% to 97.05, on track for its sixth straight month of losses. It is set to mark its worst half-year since the 1970s. 'It's kind of rotating a game of musical chairs, whether it's the 'big beautiful bill', the trade deals, and then the Iran-Israel conflict. It's all like taking turns to be at center stage; once one thing passes and the other thing is focused on,' Epstein said. Sterling weakened 0.12% to $1.3698. The Australian dollar strengthened 0.52% versus the greenback to $0.6563.
CNA
06-06-2025
- Business
- CNA
Dollar rises against major peers after better-than-expected US economic data
NEW YORK :The dollar rose against major currencies on Friday after data showed better-than-expected U.S. jobs growth in May despite a slowdown from the previous month, suggesting the Federal Reserve might wait longer to cut interest rates. Labor Department data showed that employers added 139,000 jobs in May, fewer than the 147,000 jobs added in April, but exceeding the 130,000 gain forecast in a Reuters poll of economists. The dollar was up 0.84 per cent to 144.72 against the Japanese yen and added 0.33 per cent to 0.823 against the Swiss franc. The greenback had extended gains against both safe-haven currencies following the data. The U.S. currency was headed for a second straight weekly gain against both the yen and franc, but it was still down about 8 per cent year-to-date and about 9 per cent year-to-date, respectively, against both currencies. The dollar has been weighed down by uncertainty from President Donald Trump's tariff policies and the prospects of negotiations with trading partners, the deficit spending and tax bill being considered in the Senate after it passed the House, and the trajectory of recent economic data, said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey. But the market is starting to reverse some of its short positioning against the dollar in the wake of stronger-than-expected economic data, including the jobs data, Epstein said. "Every bank is forecasting a weaker dollar, which I think is probably the right call long-term. But now you have this stretched positioning and suddenly reversing everything since you have stronger jobs numbers and stronger hourly earnings. The numbers are stronger overall and now good news is bad news because the 10-year yields went up so the cuts are not going to come," Epstein said. The euro added to losses against the dollar immediately after the jobs data and was down 0.28 per cent at $1.1413. The single currency, which is headed for a weekly gain against the greenback, had hit a six-week high of $1.14950 on Thursday following comments by European Central Bank President Christine Lagarde that the central bank was nearing the end of the monetary policy easing cycle. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.38 per cent to 99.05 on the session, but it is on track to notch a weekly loss. Trump and Chinese leader Xi Jinping held a rare leader-to-leader call on Thursday, as tensions over tit-for-tat tariffs appearing to be easing. The dollar strengthened 0.22 per cent to 7.190 versus the offshore Chinese yuan. Bitcoin gained 4.10 per cent to $104,632.06. Ethereum rose 4.67 per cent to $2,510.82.
CNA
21-05-2025
- Business
- CNA
US dollar skids on concerns about implications of Trump tax bill
LONDON/NEW YORK :The U.S. dollar fell for a third day against a range of currencies on Wednesday, as investors worried about the Trump administration's tax cut and spending bill, with Republicans still divided over the details of the legislation. U.S. President Donald Trump met with House Republicans on Tuesday and failed to convince his party's holdouts to back his sweeping tax bill. Republican hardliners continue to argue the bill does not sufficiently cut spending, according to House Speaker Mike Johnson. Amid the bill impasse, the euro rose 0.5 per cent against the dollar to $1.1339, after earlier climbing to a two-week high. "There's a general reallocation away from U.S. safe-haven assets, ex-equities, partly due to the budget bill," said Eugene Epstein, head of trading and structured products, North America, at Moneycorp in New Jersey. "Even before the bill, we already had an acceleratingly poor debt to GDP ratio. Our spending has outpaced growth." Trump's tax bill would add $3 trillion to $5 trillion to the country's debt, according to nonpartisan analysts. Traders were also wary of U.S. officials potentially angling for a weaker dollar as part of independent trade deals on the sidelines of Group of Seven finance minister meetings underway in Canada. Developments in Trump's global tariff war, which have swung currencies wildly in recent months, have slowed considerably this week, even as the clock ticks to the end of a 90-day tariff respite for U.S. trade partners in the absence of new deals. While markets remain optimistic that the White House is eager to get trade flowing again on a sustained basis, talks with close allies, Tokyo and Seoul, appear to have lost momentum. All this has combined to keep the dollar under pressure and U.S. Treasury yields rising, as the "sell America" theme continues to inform investment decisions, if in a less dramatic fashion than earlier this month. The yen strengthened against the dollar, which fell 0.6 per cent to 143.64 yen, extending gains derived in part from a steep rise this week in domestic bond yields. Yields on 30-year Japanese government bonds surged to new records on Wednesday in the wake of a poor auction result that raised doubts over coming debt sales in the weeks ahead. Super-long yields have been on the rise, following U.S. Treasury yields higher and as concerns swirled about new fiscal stimulus ahead of a Japanese upper house election slated for July. An auction of 20-year U.S. Treasuries later on Wednesday might offer a litmus test of investor appetite for long-dated U.S. debt. "Higher Japanese yields narrow the gap with U.S. Treasuries, reducing the incentive to hold the dollar," wrote analyst Fawad Razaqzada in emailed comments. "With Japanese 10-year bonds climbing and U.S. yields holding steady, the tide may be turning for dollar/yen. The currency pair which found short-lived relief around 140.00, looks vulnerable again." The yen, along with safe-havens like the Swiss franc and gold, also got a lift after CNN on Tuesday reported that new intelligence gathered by the United States suggests Israel is making preparations to strike Iranian nuclear facilities. A Moody's downgrade of the U.S. sovereign debt rating on Friday, meanwhile, may have had only a limited impact on markets, but it has added to the narrative of less faith in U.S. assets as safe havens. As a result, the dollar was down on the year against every major currency. Market participants also looked ahead to U.S.-Japan talks, with Japanese Finance Minister Katsunobu Kato later this week. Kato said ahead of an expected meeting with U.S. Treasury Secretary Scott Bessent that talks on exchange rates would be based on their shared view that excessive volatility is undesirable. In other currencies, the pound hit its highest since February 2022 after data showed UK consumer inflation flared hotter in April than most economists expected, thereby clipping some of the Bank of England's scope to cut rates quickly. Sterling was last up 0.4 per cent at $1.3443. Currency bid prices at 21 May 03:55 p.m. GMT Descripti RIC Last U.S. Pct YTD Pct High Low on Close Change Bid Bid Previous Session Dollar 99.511 99.963 -0.44 per cent -8.28 per cent 99.971 99.3 index 95 Euro/Doll 1.1337 1.1286 0.46 per cent 9.51 per cent $1.1362 $1.1 ar 281 Dollar/Ye 143.67 144.575 -0.6 per cent -8.67 per cent 144.415 143. n 465 Euro/Yen 162.89 163.03 -0.09 per cent -0.2 per cent 163.3 162. 67 Dollar/Sw 0.8254 0.8284 -0.36 per cent -9.05 per cent 0.8284 0.82 iss 1 Sterling/ 1.3439 1.3391 0.37 per cent 7.47 per cent $1.3468 $1.3 Dollar 387 Dollar/Ca 1.3824 1.3915 -0.64 per cent -3.86 per cent 1.3912 1.38 nadian 25 Aussie/Do 0.6464 0.6424 0.65 per cent 4.49 per cent $0.6466 $0.6 llar 419 Euro/Swis 0.9357 0.9344 0.14 per cent -0.38 per cent 0.9361 0.93 s 15 Euro/Ster 0.8433 0.8423 0.13 per cent 1.95 per cent 0.8459 0.84 ling 23 NZ 0.5962 0.5926 0.62 per cent 6.57 per cent $0.5964 0.59 Dollar/Do 22 llar Dollar/No 10.1279 10.2465 -1.16 per cent -10.85 per cent 10.2578 10.1 rway 268 Euro/Norw 11.4872 11.5624 -0.65 per cent -2.39 per cent 11.605 11.4 ay 68 Dollar/Sw 9.5539 9.6301 -0.79 per cent -13.28 per cent 9.6441 9.54 eden 33 Euro/Swed 10.8313 10.8669 -0.33 per cent -5.54 per cent 10.8865 10.8 en 28
