Latest news with #US dollar
Bloomberg
4 days ago
- Business
- Bloomberg
Italy's Giorgetti Is Worrying About Fallout From the Trade War
Italian Finance Minister Giancarlo Giorgetti said he's concerned about potential damage to European economies from trade tensions and the weakening of the US dollar. 'We are worried about the impact of economic uncertainty and persistent commercial tensions on our economies,' Giorgetti said on Friday, speaking from South Africa where he is attending a Group of 20 meeting of finance ministers. 'The weakening of the US dollar is adding to the impact of higher tariffs.'
Free Malaysia Today
13-07-2025
- Business
- Free Malaysia Today
We're done catching a cold when US sneezes, thanks
So it has come to pass: the '90 trade deals in 90 days' deadline set by US President Donald Trump is up, and as expected, there weren't 90 deals signed. However, Malaysia is among the ever-increasing number of countries receiving a form letter from Trump inviting us to trade with the US, the richest country in the world. Such letters, unprecedented as they are, are what now pass for trade deals and diplomacy. We'd certainly like to accept that invite, although the threat of harsher tariffs by Aug 1 if we didn't is a bit of a concern. The new Aug 1 deadline is firm… or flexible… or firm… depending on who and when it's being mentioned. So here we go again. Meanwhile Malaysia, both as a country and as the current chair of Asean, is cozying up to BRICS, the grouping of newly emerging economies that's grown since Brazil, Russia, India, China and South Africa became founding members. Turning to BRICS certainly carries some risks. Trump has threatened a 10% tariff on BRICS members if they try to overturn the status of the US dollar as the world's reserve currency through what is called 'de-dollarisation'. And even before doing so, he has already imposed a 50% tariff on Brazil for being mean to him as well as to his friend, the embattled previous president of Brazil, Joao Bolsonaro. And this is happening to a country with whom the US actually enjoys a positive balance of trade. Some Malaysians are rightfully worried about us also raising Trump's ire. Given the importance of trade with the US, these are valid fears, and it's understandable that some feel we should keep our heads down. What Malaysia should do But here are some perspectives on why I think it's worth the risk. First, we're never going to get zero tariff from the US, unless Trump is especially besotted with us, as he is with Russia. Even if our balance of trade is in favour of the US – as with Australia, Singapore, and Brazil – we'd still be hit by tariffs under one pretext or another. Trump is not beyond tearing up trade agreements he doesn't like, even those that he himself had signed earlier. Why? Because in spite of all the claims about fixing the balance of trade, the main reasons tariffs are being imposed by the US are quite simple. One is that Trump is a bully who enjoys the disruption he creates. He gets people all worked up in an uproar and then sits back and enjoys the spectacle. Once that has become normalised, he'll do something even more outrageous. And the cycle repeats again and again. So, expect more outrageous claims and accusations and threats, whether about trade or about anything else at all. Using up all the oxygen in the room has worked for him before, and he's just replaying his old favourites. The other, even more important reason, is tariffs have become the ideological nirvana of the extreme right MAGA Americans. These people, many of whom actually regard taxation as theft by the state against its citizens, have already passed laws that'll bring down the taxes of the ultra-rich, who are often their supports or their donors. Back to the 19th century Meanwhile Trump has spoken about setting up an External Revenue Service to handle tariffs, much like the Internal Revenue Service that now handles income taxes. The goal is to reduce the income taxes to nothing, and derive all the revenue needed to run the country through tariffs alone. Everything else, such as bringing back manufacturing, is just a distraction, especially the outright lies that it's the foreign countries and not local US citizens and businesses who will actually pay the tariffs. The America that Trump wants to make great again isn't the America that sent men to the moon, or helped win World Wars I and II. He's harking all the way back to the 19th century, before income taxes were introduced, when tariffs were the government's chief revenue earner. So, tariffs would be imposed by Trump on other countries no matter what. That they would wreak havoc on the US and global economy is not something that keeps him awake at night. It is delusional to think we could sweet talk our way out of them. Here's a way forward we need to consider. No country has borne the brunt of the US's economic and political aggression more than their closest neighbour, Canada, which now faces multiple tariffs, including 50% tariffs on steel and aluminium – two of its biggest exports to the US. Such a level of tariffs would be devastating on Canada – but the country has recognised that danger early enough and is pivoting away from the US, to other more friendly parts of the world, especially Europe and Asia. Canada's latest trade figures show an unsurprising decline in exports to the US, but surprisingly, a growth in total exports due to new foreign markets especially for oil and gas and agricultural products. Recession in US Meanwhile, the US economy, all claims and boasts aside, shrunk in the first quarter, and is likely to have shrunk in the recently concluded second quarter too, which would place it officially in an economic recession. And the US is also running up new and old debts by the trillions now and over the coming years, amid higher interest rates and a reduced appetite for US bonds among traditional lenders. It's clear by now the US is not playing some brilliant 4D chess. Other nations are finding out that appeasing Trump doesn't take the target off your back, and that moving forward to form new alliances and creating new markets might just be the only solution. The US doesn't have all the cards it claims to have. At some point, the combination of the inevitable recession, escalating inflation and high interest burden on their national debt and their economy at large will either bring about a 'regime change' or – as some wags have nicely put it – a 'chickening out'. While we must always be sensitive about the increasing unpredictability and even irrationality of the US, we mustn't forget an important factor – that BRICS, in its current membership, already has a total economy bigger than the G7 industrialised nations, which includes the US. Taking the BRICS road While focusing on the US, which forms a quarter of the world's economy, we mustn't forget the bigger, faster-growing and friendlier economies of BRICS. While BRICS are still far away from some truly earth-shaking moves, such as a common currency or outright de-dollarisation of trade, the US is forcing everybody else to look for new allies and friends and to reprioritise their strategies. We're basically surrounded by BRICS – India and China at the top, and Indonesia down below – with Asean itself becoming an increasingly recognised bloc. People in the west even know what Asean stands for now, as opposed to an American colleague of mine years ago who corrected me when I mentioned Asean, saying that is not how Asian is spelt! For too long we've taken the easier route of putting most of our eggs in the US basket. And for the longest time, that had benefited both parties tremendously. That relationship, however, in the words of Canada's Prime Minister Mark Carney, is over. Even without a US recession, the economic growth of an expanding BRICS would mean the US would have a slowly diminishing share of the world economy. This inevitability is also being speeded up by the US behaving unpredictably and often capriciously against its friends and allies. Look at how horribly the USA is treating Vietnam and Cambodia, countries that it almost destroyed during the Vietnam war. And yet these are countries that actually tried to suck up to Trump by being among the earliest to sign trade deals. That didn't work. Neither did it work for the United Kingdom, all lost and alone post-Brexit, obsequiously and embarrassingly sucking up to Trump. The humiliation may have been worthwhile had they obtained something meaningful, but they didn't. Future outlook Surprisingly, the new tariffs against Malaysia may not hurt us as much as you think. Competitors from Thailand or Indonesia or China for some of our key exports to the US, such as rubber gloves and medical products, face even higher tariffs than Malaysia. Not to mention that manufacturing of these products is never, ever, going back to the US, tariffs or no tariffs. Regardless of all that, Malaysia still has to start looking around for new markets and trade partners. That means pulling Asean closer together into a real economic bloc, but it also means making friends among the giants of tomorrow, such as China, India and the other BRICS economies. At some point, this madness in the US will be over, but it'll leave behind a much diminished and isolated US. The future won't be dominated by old, sclerotic Europe or Japan, or self-sabotaging US. It'll be a world dominated by BRICS. We have to make our moves early, and along with Asean, become a significant force charting the way forward for BRICS. That certainly doesn't mean abandoning the West, but it does mean that we will no longer live in fear of catching a cold when the US sneezes. The views expressed are those of the writer and do not necessarily reflect those of FMT.
Bloomberg
11-07-2025
- Business
- Bloomberg
Singapore Dollar Has Shot at Climbing to Parity, Jefferies Says
There's a chance the Singapore dollar will strengthen to parity against its US counterpart in the next five years, according to Jefferies Financial Group Inc. The island's currency has appreciated against virtually all its major peers since the Federal Reserve began raising interest rates in March 2022, confirming its role as the 'Swiss franc of Asia,' strategist Christopher Wood wrote in the firm's Greed & Fear newsletter.
Russia Today
10-07-2025
- Business
- Russia Today
Ruble hits two-year high against dollar
The Russian ruble surged to a two-year high against the US dollar on Thursday, buoyed by strong trade inflows and supportive government policies, according to analysts. The ruble was trading below 75 to the dollar, marking its strongest level since 2023. The currency also strengthened to 86.5 against the euro, gaining more than 5%. The rally caps two months of rising fortunes for the ruble, partly driven by optimism over peace talks on Ukraine. Two rounds of direct talks between Moscow and Kiev took place in Istanbul in mid-May and early June, but a third has yet to be scheduled. Analysts say structural and seasonal factors also continue to support the Russian currency. 'Ruble strength is supported by high exports and a broad supply of foreign currency, alongside low imports and weak demand,' Mikhail Zeltser of BCS World of Investments told RBK on Thursday. 'Funding rates for refinancing debt and foreign trade operations are also significant,' he said. Government policy is playing a key role as well, according to experts. Exporters are now required to repatriate earnings for another year, and the Central Bank has raised summer limits for hard currency sales under the budget rule. Meanwhile, the US dollar remains under pressure globally, hovering near a three-year low amid persistent trade tensions. PSB's Denis Popov said the ruble has continued to climb despite rising geopolitical risks. He pointed to shifts in US foreign policy rhetoric under President Donald Trump as a contributing factor but noted that investors seem to be brushing off those concerns. Analysts also cite increased foreign currency sales by major exporters in recent days, possibly linked to firms choosing not to use rubles for dividend payouts. Alor Broker's Igor Sokolov dismissed speculation of technical errors behind the ruble's rapid rise. 'This is part of a global shift,' he said, noting that 'macroeconomic reasons (are) driving ruble appreciation.' Some experts see room for further gains. Sokolov projected the ruble could strengthen toward 70 to the dollar, though he noted it may take time.
Malay Mail
08-07-2025
- Business
- Malay Mail
Ringgit catches cold as US turns up tariff heat
KUALA LUMPUR, July 8 — The ringgit opened lower against the US dollar on Tuesday as market sentiment turned cautious following the United States' (US) latest reciprocal tariff policy adjustments, which will take effect on Aug 1, 2025, said an analyst. At 8 am, the local note depreciated to 4.2345/2430 versus the greenback from Monday's close of 4.2310/2400. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) rose by 0.31 per cent to 97.480 points following the US government's announcement that the pause period for the reciprocal tariff would expire soon. The tariff rate for Malaysia has been revised up slightly to 25 per cent from 24 per cent prior to the pause. Mohd Afzanizam noted that under the latest round of tariffs announced, some countries — such as Laos, Myanmar, Cambodia, Bangladesh and Bosnia — are seeing a reduction in tariff rates compared with the figures given in April, while others will have unchanged or slightly higher rates. 'As for Malaysia, the tariff rate has been revised upward to 25 per cent from 24 per cent previously. We believe this will influence market sentiment today, likely leading to a risk-off mode,' he told Bernama. In this regard, Mohd Afzanizam said, the ringgit could trade on a cautious note, possibly around RM4.23 to RM4.25 today. At market open, the ringgit traded mostly lower against a basket of major currencies. The local currency appreciated versus the Japanese yen to 2.9029/9092 from 2.9091/9155 at Monday's close. However, it eased against the British pound to 5.7691/7807 from 5.7563/7685 yesterday and declined vis-à-vis the euro to 4.9700/9800 from 4.9647/9752 previously. Meanwhile, the ringgit traded lower against its Asean counterparts with the exception of the Thai baht. It rose versus the Thai baht to 12.9745/13.0082 from 12.9837/13.0173 at yesterday's close. However, the ringgit slipped vis-à-vis the Singapore dollar to 3.3110/3180 from 3.3096/3172 on Monday, weakened against the Indonesian rupiah to 260.7/261.3 from 260.5/261.2 previously, and edged down versus the Philippine peso to 7.47/7.49 from 7.46/7.48. — Bernama
