Latest news with #Rehn
Globe and Mail
05-05-2025
- Business
- Globe and Mail
Dollar Retreats on Economic Uncertainty
The dollar index (DXY00) Monday fell by -0.52%. The dollar today gave up an early advance and turned lower on economic concerns after the Apr Dallas Fed manufacturing survey of general business activity index fell more than expected to a 5-year low. The dollar is also under pressure on concerns that the US-China trade war could drag on and weigh on US growth prospects after President Trump said the US would not lower tariffs on China unless 'they give us something substantial.' In addition, Monday's fall in the 10-year T-note yield to a 2-1/2 week low weakened the dollar's interest rate differentials. The dollar on Monday initially moved higher on comments from US Treasury Secretary Bessent, who said the US is working on bilateral trade deals with 17 key trading partners, not including China. The US Apr Dallas Fed manufacturing survey of general business activity index fell -19.5 points to a 5-year low of -35.8, weaker than expectations of -17.0. The markets are discounting the chances at 9% for a -25 bp rate cut after the May 6-7 FOMC meeting, down from a 30% chance last week. EUR/USD (^EURUSD) Monday rose by +0.49%. The euro on Monday recovered from early losses and moved higher after the dollar weakened. The euro initially moved lower Monday on some dovish ECB comments. ECB Governing Council member Villeroy de Galhau said the ECB has room to cut interest rates, and ECB Governing Council member Rehn said he sees downside risks in the ECB's March inflation forecasts. ECB Governing Council member Villeroy de Galhau said the ECB has room to lower interest rates as the trade war triggered by US tariffs will weigh on the global economy but won't affect the inflation trend in Europe. ECB Governing Council member Rehn said that due to the fallout from US tariffs, 'I find it reasonable to assume that there are downside risks to the inflation outlook in the ECB's March projections.' Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Monday fell by -1.11%. The yen rallied on Monday due to short covering ahead of Thursday's BOJ policy meeting. Also, lower T-note yields on Monday were supportive of the yen. On the negative side, Monday's rally in the Nikkei Stock Index to a 4-week high reduced safe-haven demand for the yen. In addition, Monday's statement from the BOJ that it will purchase government bonds in May at the same pace as April was bearish for the yen as it damped speculation the BOJ, in a hawkish move, would cut its bond purchases. June gold (GCM2 5) Monday closed up +49.30 (+1.49%), and May silver (SIK2 5) closed down -0.005 (-0.02%). Precious metals prices on Monday settled mixed. Monday's weaker dollar and lower T-note yields supported precious metals prices. Gold also rallied Monday on dovish ECB comments. ECB Governing Council member Villeroy de Galhau said the ECB has room to lower interest rates, and ECB Governing Council member Rehn said there are downside risks to the ECB's March inflation outlook. Concern the US-China trade war will persist and undercut global economic growth is boosting safe-haven demand for gold and undercutting silver after President Trump said the US would not lower tariffs on China unless 'they give us something substantial.' Geopolitical risks in the Middle East are boosting safe-haven demand for precious metals as the Israel-Hamas and the US-Houthi conflicts continue.
Yahoo
25-04-2025
- Business
- Yahoo
ECB policymaker Rehn plays up chance of rate cut in June
WASHINGTON (Reuters) -European Central Bank policymaker Olli Rehn on Thursday played up the chance of an interest rate cut in June as the ECB's new forecasts "may well" point to inflation falling too far. The ECB cut rates for the seventh time in a year last week and warned that economic growth will take a big hit from U.S. tariffs, bolstering bets for even more monetary policy easing. Rehn, who is Finland's central bank governor, raised the prospect of a further cut in June and joined a chorus of policymakers warning about the dampening impact of trade snags on inflation, including a stronger euro and weaker economic activity. "It is quite possible that the projections for medium-term inflation under the current circumstances may well be below our (2%) target," he told a conference organized by the Reinventing Bretton Woods Committee in Washington during the spring meetings of the International Monetary Fund and World Bank. Rehn said earlier on Thursday that this scenario would justify a rate cut, which would take the rate that the ECB pays on bank deposits to 2%. Speaking earlier at the same event, Lithuanian central banker Gediminas Simkus even raised the spectre of a "deflationary environment" in Europe. ECB President Christine Lagarde refused to provide guidance about future moves in her press conference last week, saying they would depend on incoming data and policymakers would act with "readiness and agility" given the elevated uncertainty. Philip Lane, the ECB's chief economist, said there was no single right way of dealing with uncertainty, and the euro zone's central bank might cut rates more slowly or quickly depending on the circumstances. "If you say, uncertainty means ... you go more slowly or you go in smaller steps, (that's) sometimes true," Lane told a conference at the Peterson Institute for International Economics in Washington. "In other configurations ... to grapple with the uncertainty, you go big. So I think to be able to say that baseline is not the only guidance, I think it's super important." Lane dismissed, however, the prospect of resuming bond purchases or other extraordinary stimulus measures because the ECB still has room to cut rates. Klaas Knot, the Dutch central bank's president, and his French peer Francois Villeroy de Galhau said earlier this week that inflation may fall initially as a result of tariffs and the associated uncertainty. But they were less sanguine about the medium-term implications. Sign in to access your portfolio
Reuters
24-04-2025
- Business
- Reuters
ECB's Rehn says central bank may need to lower interest rates, Bloomberg News reports
April 24 (Reuters) - The European Central Bank may need to lower interest rates further and shouldn't exclude a larger reduction, Governing Council member Olli Rehn told Bloomberg News in an interview. "If in June inflation is projected to fall below our 2% inflation target over the medium term, then the right reaction is to cut rates further," he said in the interview in Washington. Rehn warned that financing conditions had tightened recently, and risks to economic growth had begun to be realised, the report added. The ECB will make a "comprehensive assessment and decide on rates", the Finnish central bank governor said, adding that "there is so much pervasive uncertainty in the air that we have to move meeting by meeting". Rehn said the possibility of a larger-than-normal 50-basis point rate cut would depend on the medium-term inflation outlook and whether the growth outlook improved or deteriorated. The ECB cut rates for the seventh time in a year last Thursday by 25 basis points to 2.25%, saying that disinflation was well on track and risks were rising that price growth is even weaker than previously thought. Sources speaking to Reuters on condition of anonymity said earlier this month that an ECB rate cut in June was still highly possible and only a major easing in trade tensions would persuade it to pause.
New Straits Times
23-04-2025
- Business
- New Straits Times
Bank of Finland chief urges unified EU stance on US tariffs and defence
HELSINKI: Bank of Finland Governor Olli Rehn on Tuesday emphasised the necessity for Europe to adopt a unified position not only on defence but also in response to the evolving US tariff policies, reported Xinhua. "According to our estimates, US tariffs and the subsequent countermeasures could significantly reduce Finland's projected growth this year," Rehn said at the midterm planning meeting of Finland's coalition government. He warned that the ongoing trade tensions triggered by US President Donald Trump are harming economic growth in the eurozone, including Finland, as the dispute continues to undermine confidence and economic performance across the region. Rehn urged the European Union (EU) to take a coherent and strategic approach to reinforce both its economic resilience and collective security. "Europe must reach a common position - not only on defence - but also in its response to US tariffs, which risk triggering broader trade conflicts," he said. Calling for diplomatic engagement, Rehn encouraged the EU to seek solutions that could prevent sharp tariff escalations and protect economic stability. He outlined a dual-track strategy already in place: proposing mutual zero tariffs while preparing proportionate countermeasures to bolster the EU's negotiating power. Moreover, Rehn called for a more ambitious trade policy aimed at expanding global trade partnerships, particularly by concluding more free trade agreements. The EU currently holds 44 free trade agreements with 76 countries, which collectively account for nearly half of the bloc's external trade, he noted. Turning to the geopolitical challenges, Rehn underscored the need to strengthen Europe's collective defence, especially in light of the ongoing Russia-Ukraine conflict and heightened global instability. While acknowledging the budgetary pressures facing many EU members, he described collective defence not just as a security imperative but also as a European public good. "Financing such efforts requires joint solutions," Rehn said, adding that EU bonds could play a key role in supporting shared defence spending. He noted that investor demand for EU bonds is rising, particularly as confidence in US fiscal policy continues to wane. Rehn's remarks followed new US trade measures introduced in early April, when Trump unveiled so-called "reciprocal" tariffs, including a 10-per cent baseline levy on all imports and steeper duties targeting specific trading partners. These actions have rattled global stock markets and fueled widespread concerns.
The Star
22-04-2025
- Business
- The Star
Bank of Finland chief urges unified EU stance on U.S. tariffs and defense
HELSINKI, April 22 (Xinhua) -- Bank of Finland Governor Olli Rehn on Tuesday emphasized the necessity for Europe to adopt a unified position not only on defense but also in response to the evolving U.S. tariff policies. "According to our estimates, U.S. tariffs and the subsequent countermeasures could significantly reduce Finland's projected growth this year," Rehn said at the midterm planning meeting of Finland's coalition government. He warned that the ongoing trade tensions triggered by U.S. President Donald Trump are harming economic growth in the eurozone, including Finland, as the dispute continues to undermine confidence and economic performance across the region. Rehn urged the European Union (EU) to take a coherent and strategic approach to reinforce both its economic resilience and collective security. "Europe must reach a common position - not only on defense - but also in its response to U.S. tariffs, which risk triggering broader trade conflicts," he said. Calling for diplomatic engagement, Rehn encouraged the EU to seek solutions that could prevent sharp tariff escalations and protect economic stability. He outlined a dual-track strategy already in place: proposing mutual zero tariffs while preparing proportionate countermeasures to bolster the EU's negotiating power. Moreover, Rehn called for a more ambitious trade policy aimed at expanding global trade partnerships, particularly by concluding more free trade agreements. The EU currently holds 44 free trade agreements with 76 countries, which collectively account for nearly half of the bloc's external trade, he noted. Turning to the geopolitical challenges, Rehn underscored the need to strengthen Europe's collective defense, especially in light of the ongoing Russia-Ukraine conflict and heightened global instability. While acknowledging the budgetary pressures facing many EU members, he described collective defense not just as a security imperative but also as a European public good. "Financing such efforts requires joint solutions," Rehn said, adding that EU bonds could play a key role in supporting shared defense spending. He noted that investor demand for EU bonds is rising, particularly as confidence in U.S. fiscal policy continues to wane. Rehn's remarks followed new U.S. trade measures introduced in early April, when Trump unveiled so-called "reciprocal" tariffs, including a 10-percent baseline levy on all imports and steeper duties targeting specific trading partners. These actions have rattled global stock markets and fueled widespread concerns.
