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CNBC
2 hours ago
- Business
- CNBC
Dollar eyes first monthly gain for the year as Fed in no hurry to ease rates
The dollar flirted with a two-month peak on Thursday after Federal Reserve Chair Jerome Powell stuck to his patient approach on rates in a closely watched policy decision and offered little insight on when they could be lowered. The greenback was also on track for its first monthly gain for the year, bolstered by a hawkish Fed and U.S. economic resilience, with uncertainty over tariffs beginning to ease given recent trade deals struck by Washington. Against a basket of currencies, the dollar was last steady at 99.77, not far from a two-month peak of 99.987 it hit in the previous session. The dollar index was set for a monthly gain of more than 3%. U.S. President Donald Trump's chaotic tariffs and fears of the dollar's demise earlier this year had undermined the currency and given it the worst start to the year since the floating exchange rate period. Those worries have since abated, giving the dollar new life. The latest push higher for the currency came on the back of the Fed's policy decision on Wednesday, after Powell reiterated it was still premature to ease rates. "We've seen the classic correlation still holding, in the sense that we've seen a hawkish Fed push up front-end yields and the U.S. dollar, equities have struggled, and the credibility of the Fed has also been probably reinforced by the view that the Fed chair is still in command," said Rodrigo Catril, senior currency strategist at National Australia Bank. "The dollar is not just consolidating, but it's actually getting a little bit of upward broader picture as well is that all these tariffs, there's at least an initial impression that the U.S. is the one that's got the upper hand." The euro was last 0.25% higher at $1.1433, having slid to a seven-week low in the previous session. It was on track to lose 3% for the month. Sterling languished near a 2-1/2-month low and last bought at $1.3248. It was similarly headed for a 3.5% monthly decline. Traders have scaled back expectations for Fed cuts this year following Powell's comments, now pricing in about 35 basis points of easing by December. Markets have also been faced with a blitz of tariff announcements ahead of an August 1 deadline for countries to secure trade deals or face steep levies. South Korea became one of the latest nations to reach an agreement with the U.S., after Trump on Wednesday said Washington will charge a 15% tariff on imports from the key Asian ally. The South Korean won strengthened on the news, rising 0.3% to 1,389.20 per dollar. Trump on Wednesday also slapped a 50% tariff on most Brazilian goods and said the United States is still negotiating with India on trade. BOJ Meet Key for investors in Asia on Thursday will be the Bank of Japan's policy decision, where expectations are for the central bank to stand pat on rates. Focus will be on whether Governor Kazuo Ueda offers any hints of another rate hike this year, as the BOJ weighs lingering tariff-induced risks to growth and mounting inflationary pressure from higher food costs. The yen wobbled near a four-month low at 149.29 ahead of the decision, headed for a monthly loss of 3.5%. "In the near term, the balance of risk is gradually shifting toward a more hawkish path - especially if inflation expectations begin to firm or household demand improves meaningfully," said Howe Chung Wan, head of Asian fixed income at Principal Asset Management. "But for now, the central bank's stance remains one of seeking more flexibility, prioritizing stability over any premature tightening." In other currencies, the Australian dollar edged up 0.13% to $0.6443 after sliding more than 1% on Wednesday. It was headed for a monthly drop of 2%. The New Zealand dollar rose 0.2% to $0.5906, having also lost more than 1% overnight. It was set to lose roughly 3% for the month.
New Straits Times
2 hours ago
- Business
- New Straits Times
Japan's Nikkei rises ahead of BOJ policy decision
TOKYO: Japan's Nikkei share average gained in early trading on Thursday as market participants focused on the Bank of Japan's policy statement due later in the day for interest rate clues. The Nikkei rose 0.5 per cent to 40,842.88 by 0058 GMT. The broader Topix gained 0.4 per cent. The BOJ is widely expected to keep interest rates steady at 0.5 per cent, but investors will search for hints in the policy statement and accompanying quarterly outlook report on when the central bank is likely to resume rate hikes. The central bank's decision does not come at a specified time, but usually comes some time after 0200 GMT, with Governor Kazuo Ueda giving a press conference from 0630 GMT. Traders have firmed up bets for the BOJ to resume raising rates from as early as October since Tokyo reached a long-awaited trade agreement with Washington earlier this month, removing a degree of uncertainty from the economic outlook. "A hike by the end of the year is becoming more priced by markets," Tapas Strickland, head of market economics at National Australia Bank, said in a podcast. "If that tentative trade deal with the US holds, then that should provide a little bit more confidence for the economy, just given where inflationary pressures are at the moment." On Thursday, shares of companies that benefit from a drop in copper prices outperformed, with Fujikura and Furukawa Elecric each rallying about 6 per cent. Earnings also lifted some stocks, with Kyocera jumping 8.4 per cent, while Nissan Motor rose more than 3 per cent. At the other end, Panasonic Holdings slumped 3.5 per cent, and chip-testing equipment maker Advantest lost 2.4 per cent, extending declines to a fourth straight session.
Yahoo
4 hours ago
- Business
- Yahoo
Dollar eyes first monthly gain for the year as Fed in no hurry to ease rates
By Rae Wee SINGAPORE (Reuters) -The dollar flirted with a two-month peak on Thursday after Federal Reserve Chair Jerome Powell stuck to his patient approach on rates in a closely watched policy decision and offered little insight on when they could be lowered. The greenback was also on track for its first monthly gain for the year, bolstered by a hawkish Fed and U.S. economic resilience, with uncertainty over tariffs beginning to ease given recent trade deals struck by Washington. Against a basket of currencies, the dollar was last steady at 99.77, not far from a two-month peak of 99.987 it hit in the previous session. The dollar index was set for a monthly gain of more than 3%. U.S. President Donald Trump's chaotic tariffs and fears of the dollar's demise earlier this year had undermined the currency and given it the worst start to the year since the floating exchange rate period. Those worries have since abated, giving the dollar new life. The latest push higher for the currency came on the back of the Fed's policy decision on Wednesday, after Powell reiterated it was still premature to ease rates. "We've seen the classic correlation still holding, in the sense that we've seen a hawkish Fed push up front-end yields and the U.S. dollar, equities have struggled, and the credibility of the Fed has also been probably reinforced by the view that the Fed chair is still in command," said Rodrigo Catril, senior currency strategist at National Australia Bank. "The dollar is not just consolidating, but it's actually getting a little bit of upward momentum ... The broader picture as well is that all these tariffs, there's at least an initial impression that the U.S. is the one that's got the upper hand." The euro was last 0.25% higher at $1.1433, having slid to a seven-week low in the previous session. It was on track to lose 3% for the month. Sterling languished near a 2-1/2-month low and last bought at $1.3248. It was similarly headed for a 3.5% monthly decline. Traders have scaled back expectations for Fed cuts this year following Powell's comments, now pricing in about 35 basis points of easing by December. Markets have also been faced with a blitz of tariff announcements ahead of an August 1 deadline for countries to secure trade deals or face steep levies. South Korea became one of the latest nations to reach an agreement with the U.S., after Trump on Wednesday said Washington will charge a 15% tariff on imports from the key Asian ally. The South Korean won strengthened on the news, rising 0.3% to 1,389.20 per dollar. Trump on Wednesday also slapped a 50% tariff on most Brazilian goods and said the United States is still negotiating with India on trade. BOJ MEET Key for investors in Asia on Thursday will be the Bank of Japan's policy decision, where expectations are for the central bank to stand pat on rates. Focus will be on whether Governor Kazuo Ueda offers any hints of another rate hike this year, as the BOJ weighs lingering tariff-induced risks to growth and mounting inflationary pressure from higher food costs. The yen wobbled near a four-month low at 149.29 ahead of the decision, headed for a monthly loss of 3.5%. "In the near term, the balance of risk is gradually shifting toward a more hawkish path - especially if inflation expectations begin to firm or household demand improves meaningfully," said Howe Chung Wan, head of Asian fixed income at Principal Asset Management. "But for now, the central bank's stance remains one of seeking more flexibility, prioritising stability over any premature tightening." In other currencies, the Australian dollar edged up 0.13% to $0.6443 after sliding more than 1% on Wednesday. It was headed for a monthly drop of 2%. The New Zealand dollar rose 0.2% to $0.5906, having also lost more than 1% overnight. It was set to lose roughly 3% for the month. 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
Reuters
4 hours ago
- Business
- Reuters
Dollar eyes first monthly gain for the year as Fed in no hurry to ease rates
SINGAPORE, July 31 (Reuters) - The dollar flirted with a two-month peak on Thursday after Federal Reserve Chair Jerome Powell stuck to his patient approach on rates in a closely watched policy decision and offered little insight on when they could be lowered. The greenback was also on track for its first monthly gain for the year, bolstered by a hawkish Fed and U.S. economic resilience, with uncertainty over tariffs beginning to ease given recent trade deals struck by Washington. Against a basket of currencies, the dollar was last steady at 99.77 , not far from a two-month peak of 99.987 it hit in the previous session. The dollar index was set for a monthly gain of more than 3%. U.S. President Donald Trump's chaotic tariffs and fears of the dollar's demise earlier this year had undermined the currency and given it the worst start to the year since the floating exchange rate period. Those worries have since abated, giving the dollar new life. The latest push higher for the currency came on the back of the Fed's policy decision on Wednesday, after Powell reiterated it was still premature to ease rates. "We've seen the classic correlation still holding, in the sense that we've seen a hawkish Fed push up front-end yields and the U.S. dollar, equities have struggled, and the credibility of the Fed has also been probably reinforced by the view that the Fed chair is still in command," said Rodrigo Catril, senior currency strategist at National Australia Bank. "The dollar is not just consolidating, but it's actually getting a little bit of upward momentum ... The broader picture as well is that all these tariffs, there's at least an initial impression that the U.S. is the one that's got the upper hand." The euro was last 0.25% higher at $1.1433, having slid to a seven-week low in the previous session. It was on track to lose 3% for the month. Sterling languished near a 2-1/2-month low and last bought at $1.3248. It was similarly headed for a 3.5% monthly decline. Traders have scaled back expectations for Fed cuts this year following Powell's comments, now pricing in about 35 basis points of easing by December. Markets have also been faced with a blitz of tariff announcements ahead of an August 1 deadline for countries to secure trade deals or face steep levies. South Korea became one of the latest nations to reach an agreement with the U.S., after Trump on Wednesday said Washington will charge a 15% tariff on imports from the key Asian ally. The South Korean won strengthened on the news, rising 0.3% to 1,389.20 per dollar. Trump on Wednesday also slapped a 50% tariff on most Brazilian goods and said the United States is still negotiating with India on trade. Key for investors in Asia on Thursday will be the Bank of Japan's policy decision, where expectations are for the central bank to stand pat on rates. Focus will be on whether Governor Kazuo Ueda offers any hints of another rate hike this year, as the BOJ weighs lingering tariff-induced risks to growth and mounting inflationary pressure from higher food costs. The yen wobbled near a four-month low at 149.29 ahead of the decision, headed for a monthly loss of 3.5%. "In the near term, the balance of risk is gradually shifting toward a more hawkish path - especially if inflation expectations begin to firm or household demand improves meaningfully," said Howe Chung Wan, head of Asian fixed income at Principal Asset Management. "But for now, the central bank's stance remains one of seeking more flexibility, prioritising stability over any premature tightening." In other currencies, the Australian dollar edged up 0.13% to $0.6443 after sliding more than 1% on Wednesday. It was headed for a monthly drop of 2%. The New Zealand dollar rose 0.2% to $0.5906, having also lost more than 1% overnight. It was set to lose roughly 3% for the month.
Business Recorder
2 days ago
- Business
- Business Recorder
Euro under pressure as US-EU trade deal fails to impress
SINGAPORE: The euro struggled to recoup its steep losses on Tuesday as investors sobered up to the fact that terms of the trade deal between the U.S. and the European Union favoured the former and hardly lifted the economic outlook of the bloc. France, on Monday, called the framework trade agreement a 'dark day' for Europe, saying the bloc had caved in to U.S. President Donald Trump with an unbalanced deal that slapped a headline 15% tariff on EU goods. German Chancellor Friedrich Merz said his economy would suffer 'significant' damage due to the agreed tariffs. The euro slid 1.3% in the previous session, its sharpest one-day percentage fall in over two months, on worries about growth and as euro-area government bond yields fell. The common currency last traded 0.07% higher at $1.1594. 'It hasn't taken long for markets to conclude that this relatively good news is still, in absolute terms, bad news as far as the near term implications for euro zone growth are concerned,' said Ray Attrill, head of FX research at National Australia Bank. 'The deal has been roundly condemned by France while others - including German Chancellor Merz, are playing up the negative consequences for exporters, and with that, economic growth.' The slide in the euro in turn boosted the dollar, which jumped 1% against a basket of currencies overnight. Dollar gains against major peers The dollar held on to gains on Tuesday and knocked sterling to a two-month low of $1.3349. The yen edged marginally higher to 148.49 per dollar. The dollar index steadied at 98.67. 'While the U.S. dollar's strength… may reflect the perception that the new U.S.-EU deal is lopsided in favour of the U.S., the U.S. dollar's strength may also reflect a feeling that the U.S. is re-engaging with the EU and with its major allies,' said Thierry Wizman, global FX and rates strategist at Macquarie Group. Still, Trump said on Monday most trading partners that do not negotiate separate trade deals would soon face tariffs of 15% to 20% on their exports to the United States, well above the broad 10% tariff he set in April. Elsewhere, the Australian dollar eased 0.05% to $0.6518, while the New Zealand dollar was little changed at $0.5972. The offshore yuan was little changed at 7.1813 per dollar. Top U.S. and Chinese economic officials met in Stockholm on Monday for more than five hours of talks aimed at resolving long-standing economic disputes at the centre of a trade war between the world's top two economies, seeking to extend a truce by three months. Apart from trade negotiations, focus this week is also on rate decisions from the Federal Reserve and the Bank of Japan (BOJ). Both central banks are expected to stand pat on rates, but traders will watch subsequent comments to gauge the timing of their next moves.
