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Business Recorder
5 days ago
- Business
- Business Recorder
Australia, NZ dollars unsettled by US broadside in global trade war
SYDNEY: The Australian dollar eased from eight-month highs on Friday after US President Donald Trump fired another round in his global trade war, slugging equities and souring risk sentiment. The threat of tariffs of 15% to 20% on most trading partners was a further blow, as Australia and New Zealand had been facing just a 10% levy. Analysts noted such high tariff levels were above those from the Great Depression and would risk a slowdown in US and global growth. 'The AUD is vulnerable to any fresh global growth downgrade, which we'd judge to be a distinct risk if the tariffs take effect,' said Ray Attrill, head of FX strategy at NAB. 'They are collectively more draconian than the 10% baseline, plus various sector specific tariffs, likely assumed in many current forecasts.' Australia is heavily reliant on free trade for its commodity exports and the Aussie faded 0.1% on the news to $0.6583, and off a new peak of $0.6595. Support lies around $0.6540 and $0.6485. The kiwi dollar also lost 0.1% to stand at $0.6025, off a top of $0.6043. Support comes in around $0.5978. The Aussie fared better against the Japanese yen to reach a five-month high of 96.46 yen. Japan faces broad US tariffs of 25%, which have already been imposed on its auto exports, putting pressure on the yen to depreciate to offset the hit to company earnings. The Aussie had been supported by a pullback in expectations for local rate cuts after the Reserve Bank of Australia wrongfooted investors on Tuesday by holding rates at 3.85%. Markets now imply a total further easing of 75 basis points, down from near 100 basis points at the start of the week. A cut is still seen as likely for August, though much depends on the outcome of consumer price figures for the second quarter due on July 30. A rise of 0.6% or 0.7% in core inflation would likely be a green light for an August cut, but anything higher could put it in jeopardy. The Reserve Bank of New Zealand this week matched market wagers by holding rates at 3.25%, though it left the door wide open to a cut in August should the economy perform as expected. Markets imply a 65% chance of a move next month, and around a 50-50 chance of a further move to 2.75%.
Business Recorder
07-07-2025
- Business
- Business Recorder
Australia, NZ dollars start big central bank week on back foot as tariff uncertainty mounts
SYDNEY: The Australian and New Zealand dollars started a big central bank week on the back foot as investors braced for US trade uncertainty that could linger for weeks now that there appears to be a delay in the tariff implementation date. The Aussie fell 0.5% on Monday to $0.6522, the lowest level in a week. It ended last week just 0.3% higher, with resistance heavy at an eight-month top of $0.6590. The kiwi dollar eased 0.4% at $0.6025, the lowest in almost two weeks. It finished last week just 0.1% higher, with stiff resistance at a nine-month peak of $0.6120. President Donald Trump said the US will start delivering tariff letters to other countries starting at 12:00 p.m. ET (1600 GMT) on Monday. Earlier, he said the higher rates would now take effect on August 1 rather than July 9. 'If we do get the letters this week, then August 1 is the deadline as opposed to the midnight on the day that (they) send them out. Australia, New Zealand dollars vulnerable as Israel-Iran conflict escalates That ostensibly leaves some wiggle room for negotiations… but what it is going to do is wreck markets with uncertainty,' said Ray Attrill, head of FX strategy at the National Australia Bank. Indeed, shares fell across Asia, with Wall Street futures down about 0.5%. The two Antipodeans are often sold as proxies for risk assets. Down Under, it is a big week for central banks, with both Australia and New Zealand set to announce their latest policy decisions. Markets have almost fully priced in a rate cut from the Reserve Bank of Australia on Tuesday with a 95% probability. Analysts at ING said as RBA turns more dovish, it could hinder gains in the Australian dollar versus other major currencies, although against the greenback, it remains a US tariff story. 'We expect AUD to lag behind NZD and potentially other high-beta currencies where there is less room for front-end rates to fall, such as SEK (the Swedish krona),' they said in a note to clients. Across the Tasman Sea, the RBNZ will meet on Wednesday and is most likely to keep the cash rate steady at 3.25%. Swaps imply a probability of 81% for no move.
Mint
07-07-2025
- Business
- Mint
Australia, NZ dollars start big central bank week on back foot as tariff uncertainty mounts
SYDNEY, July 7 (Reuters) - The Australian and New Zealand dollars started a big central bank week on the back foot as investors braced for U.S. trade uncertainty that could linger for weeks now that there appears to be a delay in the tariff implementation date. The Aussie fell 0.5% on Monday to $0.6522, the lowest level in a week. It ended last week just 0.3% higher, with resistance heavy at an eight-month top of $0.6590. The kiwi dollar eased 0.4% at $0.6025, the lowest in almost two weeks. It finished last week just 0.1% higher, with stiff resistance at a nine-month peak of $0.6120. President Donald Trump said the U.S. will start delivering tariff letters to other countries starting at 12:00 p.m. ET (1600 GMT) on Monday. Earlier, he said the higher rates would now take effect on August 1 rather than July 9. "If we do get the letters this week, then August 1 is the deadline as opposed to the midnight on the day that (they) send them out. That ostensibly leaves some wiggle room for negotiations... but what it is going to do is wreck markets with uncertainty," said Ray Attrill, head of FX strategy at the National Australia Bank. Indeed, shares fell across Asia, with Wall Street futures down about 0.5%. The two Antipodeans are often sold as proxies for risk assets. Down Under, it is a big week for central banks, with both Australia and New Zealand set to announce their latest policy decisions. Markets have almost fully priced in a rate cut from the Reserve Bank of Australia on Tuesday with a 95% probability. Analysts at ING said as RBA turns more dovish, it could hinder gains in the Australian dollar versus other major currencies, although against the greenback, it remains a U.S. tariff story. "We expect AUD to lag behind NZD and potentially other high-beta currencies where there is less room for front-end rates to fall, such as SEK (the Swedish krona)," they said in a note to clients. Across the Tasman Sea, the RBNZ will meet on Wednesday and is most likely to keep the cash rate steady at 3.25%. Swaps imply a probability of 81% for no move. (Reporting by Stella Qiu; Editing by Jamie Freed)
Zawya
01-07-2025
- Business
- Zawya
Stocks and dollar slip as investors await Trump's tax bill
Global shares dipped and the dollar traded near multi-year lows on Tuesday, having wrapped up its worst first-half performance since the 1970s, ahead of a vote over U.S. President Donald Trump's landmark tax-cut and spending legislation. Global share markets rallied to an intraday record the previous day, thanks to optimism over trade. But a marathon debate in the Senate over Trump's bill - estimated to add $3.3 trillion to the United States' debt pile - weighed on sentiment. European shares, which ended June with a roughly 6.5% year-to-date gain, were down 0.4% on the day. A vote on the sweeping tax-cut and spending bill had been expected during the Asian trading day on Tuesday, but debate raged on over a long series of amendments by Republicans and the minority Democrats. Trump wants the bill passed before the July 4 Independence Day holiday. As global trade negotiators scramble to get deals done before Trump's tariff deadlines, investors are also anticipating key U.S. labour market data on Thursday. "Trade is front and centre this week, but alongside that, we've obviously got the fate of the 'One Big Beautiful Bill', which is currently being debated in the Senate," said Ray Attrill, head of FX strategy at the National Australia Bank. Payrolls data later in the week "does have significant bearing, I think, on sentiment towards the potential timing of Fed rate cuts", he added on NAB's The Morning Call podcast. POLITICAL DRAMA Futures on the S&P 500 and Nasdaq dipped 0.2%, suggesting a modest pullback at the start of trade later. Shares in electric vehicle maker Tesla fell around 5% in pre-market trading after Trump suggested the government efficiency department should review the subsidies given to the companies of CEO Elon Musk. Musk has criticised Trump's budget bill and exchanges on social media between the two descended into increasingly personal attacks in early June. "With delivery numbers coming soon and Tesla's core auto business facing tough competition, this political drama could reignite the bear narrative just as shares were starting to recover," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. Tesla, while still ranking among the 10 most valuable companies on Wall Street, has lost around a third of its value since hitting a record high in December. Meanwhile, fellow heavyweight Nvidia is on the verge of becoming the most valuable company in history, as it edges towards a $4 trillion market capitalisation. The chipmaker's shares were down a touch in pre-market trading. On the macro front on Tuesday, fresh readings from the Bank of Japan's tankan index of business sentiment and a Chinese gauge of factory activity indicated the biggest economies in the region were probably weathering the tariff storm for now. Japan's manufacturing activity also bounced to growth for the first time in more than a year, but significant weakness in demand underlined the challenging trade outlook for Asia's export-reliant economies. The dollar weakened against the Japanese currency, dropping 0.8% to 143 yen and was little changed against the euro at $1.18, around its weakest since September 2021. The U.S. currency lost more than 10% in value against a basket of six others in the first six months of this year, marking its worst such performance in at least 50 years. Brent crude futures reversed an earlier decline, driven by expectations of an OPEC+ output hike in August, to rise 0.7% on the day to $67.22 a barrel. Spot gold rose nearly 1.5% to $3,352 an ounce. (Additional reporting by Rocky Swift in Tokyo; Editing by Kate Mayberry and Alex Richardson)
Wall Street Journal
25-06-2025
- Business
- Wall Street Journal
Asian Currencies Consolidate; Concerns Over Iran's Nuclear Sites May Weigh
0047 GMT — Asian currencies consolidate against the dollar in the morning session, but may be weighed by concerns that Iran's nuclear sites haven't been damaged that much by the U.S. attacks. A preliminary U.S. intelligence report found that the U.S. military's strikes last week on three Iranian nuclear facilities only set back Tehran's nuclear ambitions by a few months, according to people familiar with the intelligence. USD's weakness appears to have been 'undone' following this news, says Ray Attrill, head of FX Research at NAB, in a commentary. AUD/USD is little changed at 0.6493 and USD/KRW is steady at 1,358.89, according to FactSet data. (
