Latest news with #Varathan
Yahoo
a day ago
- Business
- Yahoo
The dollar posted its worst first-half performance since Nixon was president
The US Dollar Index fell 10.8% in the first half of 2025 — its worst performance since 1973. The decline is driven in part by the "Sell America" trade amid economic and political concerns. A weaker dollar boosts US exports but raises import costs and affects summer travel expenses. The dollar keeps getting deeper into the bear market as the summer travel season is in full swing. On Monday, the US Dollar Index ended the first half of the year 10.8% lower. That's its worst first-half performance since 1973, when Richard Nixon was president. At the time, the index fell 14.8%. On Tuesday, the US Dollar Index was 0.1% lower at 96.75 at 12:57 a.m. ET . The index measures the greenback against a basket of six major currencies. The sharp decline is a surprising turn for a currency typically seen as a safe haven in uncertain times. Analysts have attributed King Dollar's slump to the "Sell America" trade, as investors dumped US assets, including stocks and Treasurys, in response to President Donald Trump's trade war. Slower economic growth, political uncertainty, and rising fiscal concerns have contributed to the dollar's slide. Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan, wrote on Tuesday that the greenback is under pressure from President Donald Trump's "big beautiful bill." The bill, which is pending a vote in the Senate, is stoking concerns about an additional $3.3 trillion to the US's deficits over a decade, according to a new estimate from the nonpartisan Congressional Budget Office. "An unsustainable debt path is a key motivator of the 'Sell America' narrative that has compromised USD and USD assets," wrote Varathan. Meanwhile, pull factors in other parts of the world are enticing investors, according to Sami Pepin, a fixed-income strategist at Lombard Odier, a Swiss private bank. They include defense and government spending plans in the euro zone and better stock performances elsewhere. "Combined with broad-based concerns about global investors' high exposure to US assets, the result is strong negative USD sentiment, with limited respite," he wrote. Despite the dollar's weakness, US stock markets have recently hit record highs. Treasurys have also made some recovery since their selloff in recent months. The conflict is not irreconcilable, as investors appear to be hedging, not selling, the US market, according to Varathan. "A naked 'Sell America' position can be a costly endeavour," he wrote. "Hedging for US risks via a bearish USD while being invested in US equities and USTs may be the compelling play for a while yet," he added. A weaker currency isn't all negative for the US. It's good for exports, which translates into profits and sales for US companies overseas. However, it means imports could get more expensive — and even stoke inflation. More immediately, summer vacations abroad could get more expensive for travelers. The dollar's decline means that it has been losing ground against major currencies, including the euro and the British pound. On Monday, the dollar hit a four-year low against the euro. Asian currencies have also made broad gains against the dollar, with the Japanese yen 9.3% higher this year. Read the original article on Business Insider 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
Business Insider
2 days ago
- Business
- Business Insider
The dollar posted its worst first-half performance since Nixon was president
The dollar keeps getting deeper into the bear market as the summer travel season is in full swing. On Monday, the US Dollar Index ended the first half of the year 10.8% lower. That's its worst first-half performance since 1973, when Richard Nixon was president. At the time, the index fell 14.8%. On Tuesday, the US Dollar Index was 0.1% lower at 96.75 at 12:57 a.m. ET . The index measures the greenback against a basket of six major currencies. The sharp decline is a surprising turn for a currency typically seen as a safe haven in uncertain times. Analysts have attributed King Dollar's slump to the "Sell America" trade, as investors dumped US assets, including stocks and Treasurys, in response to President Donald Trump's trade war. Slower economic growth, political uncertainty, and rising fiscal concerns have contributed to the dollar's slide. Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan, wrote on Tuesday that the greenback is under pressure from President Donald Trump's "big beautiful bill." The bill, which is pending a vote in the Senate, is stoking concerns about an additional $3.3 trillion to the US's deficits over a decade, according to a new estimate from the nonpartisan Congressional Budget Office. "An unsustainable debt path is a key motivator of the 'Sell America' narrative that has compromised USD and USD assets," wrote Varathan. Investors could be hedging, not selling America Meanwhile, pull factors in other parts of the world are enticing investors, according to Sami Pepin, a fixed-income strategist at Lombard Odier, a Swiss private bank. They include defense and government spending plans in the euro zone and better stock performances elsewhere. "Combined with broad-based concerns about global investors' high exposure to US assets, the result is strong negative USD sentiment, with limited respite," he wrote. Despite the dollar's weakness, US stock markets have recently hit record highs. Treasurys have also made some recovery since their selloff in recent months. The conflict is not irreconcilable, as investors appear to be hedging, not selling, the US market, according to Varathan. "A naked 'Sell America' position can be a costly endeavour," he wrote. "Hedging for US risks via a bearish USD while being invested in US equities and USTs may be the compelling play for a while yet," he added. A weak dollar is bad for imports and summer vacations abroad A weaker currency isn't all negative for the US. It's good for exports, which translates into profits and sales for US companies overseas. However, it means imports could get more expensive — and even stoke inflation. More immediately, summer vacations abroad could get more expensive for travelers. The dollar's decline means that it has been losing ground against major currencies, including the euro and the British pound. On Monday, the dollar hit a four-year low against the euro.
Business Insider
17-06-2025
- Business
- Business Insider
Oil futures jump and US futures slump after Trump warns 'everyone' to evacuate Tehran
Oil futures jumped after President Trump warned "everyone" to evacuate Tehran amid Israel and Iran's conflict. Trump's remark stoked uncertainty and market volatility. Markets are concerned about Iran's frequent threats to block a key oil and gas shipping route. Crude oil futures jumped in late Monday trading after President Donald Trump issued a warning about the Israel-Iran conflict on social media. "IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!" he wrote. US West Texas Intermediate oil futures jumped as much as 2.7% and were 0.3% higher at $72.05 a barrel at 9:31 p.m. ET. Brent oil futures gained as much as 2.2% before trading 0.4% higher, at $73.50 a barrel. US stock futures were also lower as of 9:34 p.m. ET: S&P 500 futures: down 0.4% at 6,064.50 Dow futures: down 0.4% at 42,698.00 Nasdaq futures: down 0.5% at 22,068.00 Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan, wrote that Trump's warning has injected even more uncertainty, risk, and volatility into the market. Varathan said that different interpretations of Trump's broader remarks might imply a strategy of brinkmanship intended to secure a deal that curtails Iran's nuclear ambitions. However, given Israel's continued strikes on Iran — and the limited prospects for negotiations — the immediate concern lies in the risk of escalation and regional spillover, Varathan added. "If the leadership in Iran smells regime change on the agenda, the risk is that it may shift from loss-minimizing survival strategies to destruction-maximizing end-game," wrote Varathan. Markets are concerned about Iran making good on its frequent threats to blockade the Strait of Hormuz, a key oil and gas shipping route, just as the US heads into peak summer demand season. "A blockade remains the key risk that could push markets into uncharted territory," wrote Janiv Shah, a vice president of oil markets at Rystad Energy, on Monday.
The Hindu
13-06-2025
- The Hindu
Three persons held for illegally selling electronic cigarettes at Thousand Lights
The city police arrested three men for illegally selling electronic cigarettes (e-cigarettes) in the Thousand Lights area. Based on a tip-off, a police team carried out a surveillance near Spencer Plaza signal on Anna Salai, and nabbed two suspects, Deepak, 22, and Varathan, 23, both residents of Thiruvanmiyur, while they were selling banned e-cigarettes. Following interrogation, a third suspect, Mohammed Naseeb, 35, residing near Zam Bazaar Market in Triplicane, was also arrested. Investigations revealed that he operated a mobile phone shop in Royapettah, and had supplied e-cigarettes in bulk to the other two accused. A total of 295 e-cigarettes, two mobile phones, including an iPhone, ₹15,500 in cash, and two motorcycles were seized during the operation. All the three accused were produced before the court on Thursday, and have been remanded to judicial custody.
CNBC
20-05-2025
- Business
- CNBC
U.S. Treasury yields slip as Fed signals just one rate cut in 2025
U.S. Treasury yields slipped early Tuesday after the U.S. Federal Reserve signaled just one rate cut in 2025. The 30-year Treasury yield slipped almost 3 basis points after briefly surging past 5% on Monday. The 10-year yield dipped 2 basis points to 4.455% at 1:50 a.m. ET, and the 2-year Treasury yield shed slightly over 1 basis point to 3.97%. One basis point is equivalent to 0.01%, and yields and prices move in opposite directions. Last Friday, Moody's Ratings lowered the U.S. credit rating to the second-highest tier, following in the footsteps of S&P Global Ratings and Fitch, which did so in 2011 and 2023, respectively. The downgrade from Aaa to Aa1 by Moody's is "admittedly significantly dire," said Vishnu Varathan, head of macro research at Mizuho Securities. But the move is "inconsequential" for markets, he wrote in a note. Though the resultant jolt in yields may clip already tentative market optimism, the downgrade is unlikely to crush the broader recovery, he added. The downgrade has no adverse impact on the liquidity and collateral value of U.S. Treasurys, and hence no "imminent shock" from forced liquidation, Varathan said. "Above all, there are no triple-A alternatives for markets that are sufficiently deep and liquid to threaten the reserve asset status of USTs that is tagged to the U.S. Dollar's global reserve currency status," he added. In April, U.S. Treasury yields surged after U.S. President Donald Trump introduced broad "reciprocal tariffs" targeting foreign trade partners. Concerns over a potential financial panic and higher consumer borrowing costs led the administration to scale back the most aggressive tariffs. On top of that, Atlanta Federal Reserve President Raphael Bostic told CNBC on Monday he's leaning toward just one interest rate cut this year, as the central bank seeks to strike a balance between containing inflation risks and avoiding an economic downturn. Although the Fed's March projections indicated two 25-basis-point cuts in 2025, Bostic noted that the impact of tariffs has been more significant than anticipated.
