Latest news with #currencyintervention
South China Morning Post
24-06-2025
- Business
- South China Morning Post
Trade war worries push Asian central banks to curb currency intervention
Some of emerging Asia's biggest central banks look to be dialling back their interventions in the currency market. The central banks of India and Malaysia have reduced the size of some derivatives positions they use to weaken their currencies. Taiwan has allowed its currency to surge against the US dollar in recent weeks and dropped hints it would be comfortable with more if the moves were 'orderly'. South Korea 's giant national pension fund has ended its five-month support of the won. A major reason for these moves is a simple change in the market landscape: the dollar has tumbled more than 7 per cent this year, easing pressure on emerging market currencies. But strategists and investors also point to the risk of a backlash from US President Donald Trump , amid rising speculation that currency policies will be on the table during a series of ongoing – and high-stakes – trade negotiations. The threat of being labelled a currency manipulator by the US, especially during this period of tariff negotiations, will act as a deterrent Rajeev De Mello, investment manager 'The threat of being labelled a currency manipulator by the US, especially during this period of tariff negotiations, will act as a deterrent to further heavy FX intervention in local markets,' said Rajeev De Mello, a Geneva-based portfolio manager at GAMA Asset Management. The shifting approach of Asia's central banks to defending their currencies reinforces the sweeping changes in global markets since the election of Trump, whose on-again, off-again tariff threats have roiled asset prices and raised once unthinkable questions about the US dollar's place in the global trading system. South Korea confirmed last month that it had held currency talks with the US, sending the won higher amid talk that Trump wants a weaker dollar. But White House chief economist Stephen Miran has denied the idea Washington is working on secret deals to depreciate the dollar, saying the US continues to have a strong dollar policy. The US dollar has plummeted against major currencies this year, suffering drops of around 10 per cent against the euro and the Swiss franc.
Yahoo
22-06-2025
- Business
- Yahoo
Central Banks in Asia Are Becoming Wary of Currency Intervention
(Bloomberg) -- Some of emerging Asia's biggest central banks look to be dialing back their interventions in the currency market. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports The central banks of India and Malaysia have reduced the size of some derivatives positions they use to weaken their currencies. Taiwan has allowed its currency to surge against the dollar in recent weeks and dropped hints it would be comfortable with more if the moves were 'orderly.' South Korea's giant national pension fund has ended its five-month support of the won. A major reason for these moves is a simple change in the market landscape: The dollar has tumbled more than 7% this year, easing pressure on emerging market currencies. But strategists and investors also point to the risk of a backlash from US President Donald Trump, amid rising speculation that currency policies will be on the table during a series of ongoing — and high stakes — trade negotiations. 'The threat of being labeled a currency manipulator by the US, especially during this period of tariff negotiations, will act as a deterrent to further heavy FX intervention in local markets,' said Rajeev De Mello, a Geneva-based portfolio manager at GAMA Asset Management SA. The shifting approach of Asia's central banks to defending their currencies underscores the sweeping changes in global markets since the election of Trump, whose on again-off again tariff threats have roiled asset prices and raised once unthinkable questions about the dollar's place in the global trading system. Korea confirmed last month that it had held currency talks with the US, sending the won higher amid talk that Trump wants a weaker dollar. But White House chief economist Stephen Miran has denied the idea Washington is working on secret deals to depreciate the greenback, saying the US continues to have a strong dollar policy. The greenback has plummeted against major currencies this year, suffering drops of around 10% against the euro and the Swiss franc. Best Bets Traders are now trying to game out which currencies have the most to gain from a period of reduced intervention. The Korean won and the Malaysian ringgit are two obvious candidates, since both countries have large trade surpluses, said Gautam Kalani, portfolio manager for BlueBay fixed income, emerging markets, at RBC Global Asset Management. Reduced intervention will speed up the appreciation of these currencies, he said. The Taiwan dollar is also being hotly tipped by strategists. Although Taiwan's central bank is still likely to use intervention to keep volatility in check, most market participants think it will allow the local currency to appreciate further even after hitting multi-year highs. That suggests room to build on what has already been a widespread rally against the dollar: Taiwan's currency has surged 11% against the greenback this year, making it the region's best performer. The Korean won is up almost 8%, while the Malaysian ringgit is around 5% higher. The retreat from intervention isn't unanimous across Asia. Bank Indonesia pushed back against volatility on Thursday as Middle East tensions hit emerging market currencies. The Philippines' central bank has sent mixed messages, calling intervention futile but also saying it might have to do so 'more seriously' if a current slide in the peso continues. The People's Bank of China continues to keep its currency under a tight leash. But for some of emerging Asia's most interventionist central banks, the calculus appears to have shifted in favor of a less hands-on approach. The US Treasury refrained from labeling any country a currency manipulator in its latest foreign-exchange report, released in June. However, it said China, Japan, South Korea, Taiwan, Singapore and Vietnam all met two out of three of its criteria. What to Watch A host of EM central banks will announce their rate decisions, with Thailand and Czech Republic's slated for Wednesday, Mexico's on Thursday and Colombia set to announce its benchmark rate call on Friday Malaysia and Singapore will publish inflation statistics, with signs of disinflation to support further monetary easing policies Argentina and the Czech Republic will also publish first quarter GDP figures --With assistance from Betty Hou. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. 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
21-06-2025
- Business
- Reuters
SNB's Schlegel still ready to intervene in forex markets despite U.S. list
ZURICH, June 21 (Reuters) - The Swiss National Bank is ready to intervene in foreign currency markets to hit its inflation target, Chairman Martin Schlegel said, despite Switzerland recently being added to a U.S. watch list on currency manipulation. The SNB, which cut its key interest rate to zero on Thursday, uses interest rates to steer inflation to its 0-2% target, Schlegel told broadcaster SRF. "We're also ready to be active on the currency markets," Schlegel said in the interview broadcast on Saturday. The U.S. Treasury this month put Switzerland on a list of countries being monitored for unfair currency and trade practices. Bern is seeking to avoid the 31% trade tariffs Washington has threatened against Switzerland, and Schlegel said the SNB conducts policy in the national interest. "Switzerland and the SNB are not currency manipulators," he said. "When we have intervened in the past, we have done it only to achieve our goal of price stability. Our motivation is not to gain an unfair advantage for Swiss exporters." There had been a "very good" exchange with U.S. officials the last time Switzerland appeared on the list, and there was a good understanding of why Switzerland was active in foreign currency markets, he said. Even if Switzerland did reappear on the list, that would mean further dialogue, Schlegel added. He also backed the government's proposals for stricter rules for UBS (UBSG.S), opens new tab, unveiled earlier this month, which could force the bank to hold $26 billion more in core capital. "This is not a radical solution," said Schlegel. "Everyone has an interest in UBS doing well, that UBS is a strong bank and that UBS is also a bank that is strongly capitalised and well prepared in terms of liquidity."
Yahoo
21-06-2025
- Business
- Yahoo
SNB's Schlegel still ready to intervene in forex markets despite U.S. list
ZURICH (Reuters) -The Swiss National Bank is ready to intervene in foreign currency markets to hit its inflation target, Chairman Martin Schlegel said, despite Switzerland recently being added to a U.S. watch list on currency manipulation. The SNB, which cut its key interest rate to zero on Thursday, uses interest rates to steer inflation to its 0-2% target, Schlegel told broadcaster SRF. "We're also ready to be active on the currency markets," Schlegel said in the interview broadcast on Saturday. The U.S. Treasury this month put Switzerland on a list of countries being monitored for unfair currency and trade practices. Bern is seeking to avoid the 31% trade tariffs Washington has threatened against Switzerland, and Schlegel said the SNB conducts policy in the national interest. "Switzerland and the SNB are not currency manipulators," he said. "When we have intervened in the past, we have done it only to achieve our goal of price stability. Our motivation is not to gain an unfair advantage for Swiss exporters." There had been a "very good" exchange with U.S. officials the last time Switzerland appeared on the list, and there was a good understanding of why Switzerland was active in foreign currency markets, he said. Even if Switzerland did reappear on the list, that would mean further dialogue, Schlegel added. He also backed the government's proposals for stricter rules for UBS, unveiled earlier this month, which could force the bank to hold $26 billion more in core capital. "This is not a radical solution," said Schlegel. "Everyone has an interest in UBS doing well, that UBS is a strong bank and that UBS is also a bank that is strongly capitalised and well prepared in terms of liquidity." 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
Bloomberg
06-06-2025
- Business
- Bloomberg
South Korea to Keep Discussing Forex With US After Currency List
South Korea will continue to discuss its foreign exchange policy with the US to promote mutual understanding, after the Treasury kept the Asian ally on its watchlist and called for curbing currency intervention. The Treasury Department, in a semiannual foreign-exchange report released Thursday, didn't label any country a currency manipulator but kept South Korea on its monitoring list for currency practices alongside China and Japan, among other countries.
