Franklin Templeton fund manager loses $1.8 billion in one day on Argentina bets: Financial Times

Consumers are America’s not so secret weapon to lift economyWith markets reeling from recession fears, the world is watching the so far resilient U.S. consumer, now in the strongest position since before the financial crisis. Market Insiderread more


Consumers are America’s not so secret weapon to lift economyWith markets reeling from recession fears, the world is watching the so far resilient U.S. consumer, now in the strongest position since before the financial crisis. Market Insiderread more
Franklin Templeton fund manager loses $1.8 billion in one day on Argentina bets: Financial Times Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: jesse pound, patti domm
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Franklin Templeton fund manager loses $1.8 billion in one day on Argentina bets: Financial Times

Consumers are America’s not so secret weapon to lift economy

With markets reeling from recession fears, the world is watching the so far resilient U.S. consumer, now in the strongest position since before the financial crisis.

Market Insider

read more


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: jesse pound, patti domm
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Dollar weakens as September rate cut bets mount

“On balance it is probably a slightly dollar-negative number because I do think that the totality of the report increases the case for a Fed rate cut in September. The U.S. central bank on Wednesday cut its short-term interest rate for the first time since 2008. Following the cut, the dollar rose in sympathy with U.S. Treasury note prices, but that move had largely been retraced on Friday. The chance of a September rate cut was 98.1% on Friday afternoon, according to CME Group’s FedWatch tool, a


“On balance it is probably a slightly dollar-negative number because I do think that the totality of the report increases the case for a Fed rate cut in September. The U.S. central bank on Wednesday cut its short-term interest rate for the first time since 2008. Following the cut, the dollar rose in sympathy with U.S. Treasury note prices, but that move had largely been retraced on Friday. The chance of a September rate cut was 98.1% on Friday afternoon, according to CME Group’s FedWatch tool, a
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Dollar weakens as September rate cut bets mount

The dollar fell broadly on Friday as news of slower U.S. employment growth in July and heightened U.S.-China trade tensions fueled expectations that the Federal Reserve would cut interest rates again in September.

Nonfarm payrolls increased by 164,000 jobs in July, fewer than the month prior, and wages increased modestly, the Labor Department said. The report came a day after U.S. President Donald Trump announced an additional 10% tariff on $300 billion worth of Chinese imports starting Sept. 1, leading financial markets to almost fully price in a September rate cut.

The dollar fell 0.76% against the Japanese yen to its lowest since Jan. 3, last at 106.50. Versus the euro it was 0.22% weaker at $1.1109. The Swiss franc, which like the yen serves as a safe-haven investment in times of market volatility, was 0.83% stronger to 0.9818 franc per dollar.

“On balance it is probably a slightly dollar-negative number because I do think that the totality of the report increases the case for a Fed rate cut in September. We’re already at the point where we’re trading that,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.

The U.S. central bank on Wednesday cut its short-term interest rate for the first time since 2008. Fed Chair Jerome Powell described the widely anticipated 25-basis-point monetary policy easing as a mid-cycle policy adjustment to protect U.S. expansion from the global economic slowdown happening outside its borders.

Following the cut, the dollar rose in sympathy with U.S. Treasury note prices, but that move had largely been retraced on Friday.

The chance of a September rate cut was 98.1% on Friday afternoon, according to CME Group’s FedWatch tool, a large jump from 56.2% a week prior. Not all market participants were persuaded.

“We think that’s way too high. Clearly what (Powell) wanted to convey at the press conference was that there’s no certainty about what the next move is going to be,” said Gershon Distenfeld, co-head of fixed income at AllianceBernstein.

“The reality is that if the intention was to ease monetary conditions, this did exactly the opposite. Equities are down, the curve is flatter, the dollar higher – all monetary tightening conditions here in the U.S. So they didn’t really accomplish much except getting markets nervous.”


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Rate cut bets keeps dollar on track for biggest weekly drop in three weeks

Against a basket of other currencies, the dollar fell 0.1% to 96.94 and was on track for its biggest weekly drop in three weeks. The core U.S. consumer price index, excluding food and energy, rose 0.3% in June, the largest increase since January 2018, data on Thursday showed. Other currencies which benefited from a weaker dollar were in markets whose central banks signaled a relatively confident outlook to interest rates. Sweden’s crown also benefited from a relatively optimistic assessment of i


Against a basket of other currencies, the dollar fell 0.1% to 96.94 and was on track for its biggest weekly drop in three weeks. The core U.S. consumer price index, excluding food and energy, rose 0.3% in June, the largest increase since January 2018, data on Thursday showed. Other currencies which benefited from a weaker dollar were in markets whose central banks signaled a relatively confident outlook to interest rates. Sweden’s crown also benefited from a relatively optimistic assessment of i
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Rate cut bets keeps dollar on track for biggest weekly drop in three weeks

The dollar fell for a third consecutive day on Friday as stronger-than-expected U.S. inflation data failed to shake convictions that the Federal Reserve will start cutting interest rates at a policy meeting later this month.

Against a basket of other currencies, the dollar fell 0.1% to 96.94 and was on track for its biggest weekly drop in three weeks.

The core U.S. consumer price index, excluding food and energy, rose 0.3% in June, the largest increase since January 2018, data on Thursday showed.

The reading pushed U.S. Treasury yields higher, but money markets still indicated one rate cut at the end of July and a cumulative 64 basis points in cuts by the end of 2019.

“Cutting interest rates when inflation data is weakening makes sense, but signalling a dovish stance when inflation is rising is a bit weird and suggests there are political pressures weighing on the Fed,” said Ulrich Leuchtmann, the head of currency research at Commerzbank.

The dollar’s weakness revived carry trades, where hedge funds borrow in low-yielding currencies such as the Swiss franc and the euro to purchase higher-yielding ones such as the Australian or New Zealand dollars.

On Friday, the NZ dollar gained 0.3% to $0.6665.

Other currencies which benefited from a weaker dollar were in markets whose central banks signaled a relatively confident outlook to interest rates.

The Canadian dollar was one such beneficiary: the loonie rallied to a 10-month high versus the U.S. dollar after Canada’s central bank said this week it had no intention of easing monetary policy even as it highlighted the risks that trade wars posed to the global economy.

Higher oil prices also helped the Canadian dollar.

Sweden’s crown also benefited from a relatively optimistic assessment of its economic outlook after minutes of the central bank’s policy meeting.

The euro trimmed earlier gains after European Central Bank Governing Council member Ignazio Visco said on Friday the ECB will need to adopt further expansionary measures if the euro zone economy does not pick up and will consider its options “in the coming weeks”.

The single currency was flat at $1.1258, below an intraday high of $1.1275 in early London trading.

Market attention will be focused on comments by Chicago Fed President Charles Evans later on Friday and New York Fed President John Williams on Monday which will provide a chance to gauge how dovish the U.S. central bank will be.

“If these Fed officials are not as dovish as (Federal Reserve Chair Jerome) Powell, and if the New York Fed’s manufacturing survey on Monday proves stronger than forecast, they could show that the dollar weakening in response to Powell’s congressional testimony was overdone,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.

Powell indicated again on Thursday that an interest rate cut from the U.S. central bank is likely at its next meeting later this month as businesses slow investment due to trade disputes and a global growth slowdown.


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Dollar hovers at 3-week high on reduced bets for deep US rate cut

Traders await Fed Chairman Jerome Powell’s two-day testimony before Congress, which starts on Tuesday for clues about a rate decrease. Among emerging market currencies, the Turkish lira fell steeply after President Tayyip Erdogan dismissed the central bank governor, sparking worries about the bank’s independence. The solid job gain slashed expectations of a 50 basis point rate cut at the Fed’s July 30-31 policy meeting, although modest wage gains and other data showing the U.S. economy was losin


Traders await Fed Chairman Jerome Powell’s two-day testimony before Congress, which starts on Tuesday for clues about a rate decrease. Among emerging market currencies, the Turkish lira fell steeply after President Tayyip Erdogan dismissed the central bank governor, sparking worries about the bank’s independence. The solid job gain slashed expectations of a 50 basis point rate cut at the Fed’s July 30-31 policy meeting, although modest wage gains and other data showing the U.S. economy was losin
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Dollar hovers at 3-week high on reduced bets for deep US rate cut

The dollar edged up on Monday, hovering at a three-week high, as it held on to gains after news of a stronger-than-expected increase in U.S. jobs in June scaled back traders’ expectations of a sharp Federal Reserve rate cut at the end of July.

Traders await Fed Chairman Jerome Powell’s two-day testimony before Congress, which starts on Tuesday for clues about a rate decrease.

“Foreign-exchange markets started the week on a quiet note, with currencies trading in tight ranges, as traders shifted their focus from Fridays strong U.S. payrolls data to testimony from Federal Reserve Chairman Jerome Powell,” said Ellis Phifer, senior market strategist at Raymond James.

Among emerging market currencies, the Turkish lira fell steeply after President Tayyip Erdogan dismissed the central bank governor, sparking worries about the bank’s independence.

U.S. non-farm payrolls rebounded in June, rising the most in five months, the Labor Department said on Friday. The solid job gain slashed expectations of a 50 basis point rate cut at the Fed’s July 30-31 policy meeting, although modest wage gains and other data showing the U.S. economy was losing steam point to a quarter point rate cut.

The dollar index was up 0.08% at 97.359, which was close to a 3-week high of 97.443 hit on Friday. The greenback’s rebound follows a period of weakness as mounting expectations for Fed rate cuts weighed.

The dollar strengthened 0.18% to 108.67 yen after hitting 108.73, which was the highest since June 11.

The euro was marginally lower at $1.1214 after hitting $1.1208 on Friday. The common currency has been under pressure from dollar strength and weakness in the German industrial sector.

The British pound, which hit a six-month low below $1.25 on Friday after poor economic data and on heightened expectations that the Bank of England will cut interest rates in 2020, fell 0.22% to $1.2508.

Turkey’s lira at one point slid to a two-week low of 5.8245 to the dollar and was last down 1.59% at 5.724.

“Some naive market participants might still hope that the new central bank governor will come across as being independent in a statement announced for this week and at least does not cut interest rates right away,” Commerzbank analysts said.

“That may be the case but does not change the fact that medium term sensible Turkish monetary policy will not be possible.”

In a written statement on Saturday, new governor Murat Uysal said he would implement monetary policy instruments independently with a focus on achieving and maintaining the primary objective of price stability.


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Gold slides 2% as solid US jobs data trims Fed rate cut bets

Nonfarm payrolls increased by 224,000 jobs last month, the most in five months, data showed. “The U.S. jobs data is driving all the pressure on gold right now. That may decrease the urgency for a Fed cut in July,” said Chris Gaffney, president of world markets at TIAA Bank. Adding pressure on gold, the dollar surged to an over two-week peak against a basket of six major currencies. Meanwhile, in India, the world’s second largest gold consumer, local rates surged to record highs following a surpr


Nonfarm payrolls increased by 224,000 jobs last month, the most in five months, data showed. “The U.S. jobs data is driving all the pressure on gold right now. That may decrease the urgency for a Fed cut in July,” said Chris Gaffney, president of world markets at TIAA Bank. Adding pressure on gold, the dollar surged to an over two-week peak against a basket of six major currencies. Meanwhile, in India, the world’s second largest gold consumer, local rates surged to record highs following a surpr
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Gold slides 2% as solid US jobs data trims Fed rate cut bets

Gold slid as much as 2% on Friday and was set for its first weekly fall in seven weeks after data showed U.S. jobs growth rebounded strongly in June, which lowered the likelihood of an interest rate cut by the Federal Reserve this month.

Spot gold dropped 1.2% to $1,398.39 per ounce having hit a low of $1,386.52 earlier. The metal is set for a weekly decline of about 1%, which could be its biggest since mid-April.

U.S. gold futures shed 1.4% to $1,400.90.

Nonfarm payrolls increased by 224,000 jobs last month, the most in five months, data showed. Economists polled by Reuters had forecast payrolls rising by 160,000 jobs.

“The U.S. jobs data is driving all the pressure on gold right now. The payroll numbers crushed all expectations. That may decrease the urgency for a Fed cut in July,” said Chris Gaffney, president of world markets at TIAA Bank.

Adding pressure on gold, the dollar surged to an over two-week peak against a basket of six major currencies.

Gold is highly sensitive to interest rates and a lower chance of a cut would increase the opportunity cost of holding the non-interest-bearing bullion.

Federal funds futures implied traders now only see a 9.0% chance the U.S. central bank will decrease key money market rates by half a point, down from 29% on Wednesday, according to CME Group’s FedWatch program.

“Most of the markets though, still see some kind of cut but it pulls away that expectation of a 50-basis-points cut and most of what can be expected is a quarter-basis-point cut,” Gaffney said.

The outlook for gold still remains positive, however, analysts said. Gold hit a six-year high of $1,438.63 an ounce last week and is still holding above key technical levels.

“The yellow metal will likely find buyers as the global growth slowdown should keep demand strong for gold,” Edward Moya, senior market analyst at OANDA, said in a note.

Gold is often seen as an alternative investment during times of political and financial uncertainty.

Meanwhile, in India, the world’s second largest gold consumer, local rates surged to record highs following a surprise hike in the gold import duty on Friday.

The announcement is likely to increase the price paid by consumers, Capital Economics said in a note.

“While we had already been anticipating a slowdown in India’s gold imports this year, soaring prices and higher tariffs present an additional headwind to demand.”

Silver slid 1.8% to $15 per ounce, while platinum dipped 3% to $807.75.

Palladium gained 0.3% to $1,566.87 an ounce and was heading for a fifth straight weekly gain.


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Dollar falls to one-week low vs yen on Fed rate cut bets

The dollar slipped to a one-week low against the Japanese yen on Wednesday, undermined over the China-U.S. trade deal, and the possibility of fresh tariff hostilities with Europe. U.S. economic reports on Wednesday were mixed and did not really change the dollar’s trading direction. In mid-morning trading, the dollar dipped 0.1% against the yen to 107.75, after earlier falling to a one-week low of 107.54 . Against a basket of six currencies, the dollar eased from Tuesday’s two-week highs to trad


The dollar slipped to a one-week low against the Japanese yen on Wednesday, undermined over the China-U.S. trade deal, and the possibility of fresh tariff hostilities with Europe. U.S. economic reports on Wednesday were mixed and did not really change the dollar’s trading direction. In mid-morning trading, the dollar dipped 0.1% against the yen to 107.75, after earlier falling to a one-week low of 107.54 . Against a basket of six currencies, the dollar eased from Tuesday’s two-week highs to trad
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Dollar falls to one-week low vs yen on Fed rate cut bets

The dollar slipped to a one-week low against the Japanese yen on Wednesday, undermined over the China-U.S. trade deal, and the possibility of fresh tariff hostilities with Europe.

Volume was light ahead of the U.S. Independence Day holiday on Thursday. U.S. economic reports on Wednesday were mixed and did not really change the dollar’s trading direction.

Data from payrolls processor ADP showed U.S. companies added 102,000 private sector jobs in June, much higher than the revised 41,000 jobs in May. But the June figure was lower than the 140,000 analysts had forecast.

Paul Ashworth, chief U.S. economist at Capital Economics, said the ADP report suggests the deterioration in the broader economy has spread to the labor market.

“Even with the U.S.-China trade talks back on track, for now at least, the evidence of a slowdown in employment growth should still be enough to persuade the Federal Reserve to cut rates in either July or September, but expectations of a 50 basis-point cut seem misplaced,” he added.

Wednesday’s data also showed U.S. weekly jobless claims fell more than expected to a seasonally adjusted 221,000, while the U.S. trade deficit in May widened to $55.5 billion from April’s revised $51.2 billion.

In mid-morning trading, the dollar dipped 0.1% against the yen to 107.75, after earlier falling to a one-week low of 107.54 .

The dollar-yen pair has become more sensitive to trade developments. Investors have grown more skeptical about the possibility of a speedy resolution to the trade war, especially given U.S. President Donald Trump’s comments that any deal would have to be tilted in favour of the United States. A

gainst a basket of six currencies, the dollar eased from Tuesday’s two-week highs to trade little changed on Wednesday at 96.736. The index earlier fell as bond yields extended the previous day’s decline, with 10-year yields hitting 2-1/2-year lows below 1.94%.


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Bets on US rate cuts keep dollar on defense

Traders await fresh clues on the Fed’s stance on possible rate cuts, starting as soon as next month. Interest rates futures implied traders fully priced in a quarter-point rate cut from the Fed next month and saw high rising probability of at least two more cuts after July. “This has more legs to go,” said Paresh Upadhyaya, director of currency strategy at Amundi Pioneer Investments in Boston. The dollar was down 0.14% at 107.13 yen after hitting 106.78 yen during Asian trading, which was its we


Traders await fresh clues on the Fed’s stance on possible rate cuts, starting as soon as next month. Interest rates futures implied traders fully priced in a quarter-point rate cut from the Fed next month and saw high rising probability of at least two more cuts after July. “This has more legs to go,” said Paresh Upadhyaya, director of currency strategy at Amundi Pioneer Investments in Boston. The dollar was down 0.14% at 107.13 yen after hitting 106.78 yen during Asian trading, which was its we
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Bets on US rate cuts keep dollar on defense

The dollar slipped against most major currencies on Tuesday, hitting a three-month low versus the euro, as expectations of multiple decreases of U.S. interest rates by the Federal Reserve have spurred selling of the U.S. currency.

Growing tensions between Iran and the United States stoked fresh safe-haven buying of yen, which reached its strongest levels against the greenback since early January.

Traders await fresh clues on the Fed’s stance on possible rate cuts, starting as soon as next month.

Last week’s signal from the U.S. central bank that it was ready to lower borrowing costs to counter slowing domestic growth and sluggish inflation caused traders to exit their earlier bullish positions on the dollar, analysts said.

Interest rates futures implied traders fully priced in a quarter-point rate cut from the Fed next month and saw high rising probability of at least two more cuts after July.

Falling U.S. bond yields and bearish technical indicators have stoked the view the greenback would have more room to fall in the coming months, analysts said.

“This has more legs to go,” said Paresh Upadhyaya, director of currency strategy at Amundi Pioneer Investments in Boston.

The dollar was down 0.14% at 107.13 yen after hitting 106.78 yen during Asian trading, which was its weakest since Jan. 3.

Demand for the yen was underpinned by new U.S. sanctions against Iran’s supreme leader and foreign minister. Iran said on Tuesday the move had closed off diplomacy between the two countries.

The greenback was 0.33% lower versus the pound.

It was modestly weaker against the Canadian, Australian and New Zealand dollars. On the other hand, the euro was down 0.12% at $1.1384.

The single currency retreated from $1.1412 earlier Tuesday, which was its highest since March 21.

The dollar index moved further away from its 200-day moving average at 95.995. Investors are monitoring whether U.S. President Donald Trump and Chinese President Xi Jinping will at least call a truce in their trade war when they meet at a summit of the G20 major economies in Osaka, Japan, later this week.

“The next risk event is the G20 summit. It will give us a sense just how far things are between U.S. and China on trade,” Upadhyaya said. Trump considers his meeting with Xi an opportunity to “maintain his engagement” and see where China is on their trade dispute, a senior U.S. official said on Monday.


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‘Perfect storm’ for dollar as bets on US rate cuts grow

The dollar fell on Wednesday as rising trade tensions between Washington and Beijing and growing bets on a U.S. interest rate cut sapped investor demand for the currency. A Fed watch tool by CME assigns a 18% probability of a U.S. rate cut next week and a 68% probability of a cut in July. “This is a perfect storm for the dollar, and that is also undermining risk appetite broadly in the market,” said Ricardo Evangelista, a senior analyst at ActivTrades in London. It also weakened against the Hong


The dollar fell on Wednesday as rising trade tensions between Washington and Beijing and growing bets on a U.S. interest rate cut sapped investor demand for the currency. A Fed watch tool by CME assigns a 18% probability of a U.S. rate cut next week and a 68% probability of a cut in July. “This is a perfect storm for the dollar, and that is also undermining risk appetite broadly in the market,” said Ricardo Evangelista, a senior analyst at ActivTrades in London. It also weakened against the Hong
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'Perfect storm' for dollar as bets on US rate cuts grow

The dollar fell on Wednesday as rising trade tensions between Washington and Beijing and growing bets on a U.S. interest rate cut sapped investor demand for the currency.

Against a basket of other currencies, the dollar edged 0.1 percent lower to 96.64 and just above a two-and-a-half-month low of 96.46 reached last week.

The dollar has suffered a setback after the latest escalation of the U.S.-China trade, which analysts fear could tip the global economy into recession.

Those fears have grown as recent data have pointed to a global economic slowdown. Chinese factory inflation slowed in May and Fed officials have become increasingly cautious. That has fuelled expectations of U.S. rate cuts, a shift from a few months.

A Fed watch tool by CME assigns a 18% probability of a U.S. rate cut next week and a 68% probability of a cut in July.

“This is a perfect storm for the dollar, and that is also undermining risk appetite broadly in the market,” said Ricardo Evangelista, a senior analyst at ActivTrades in London.

The dollar slipped as much as 0.2% against the pound, taking its losses to nearly 1% so far this month.

It also weakened against the Hong Kong dollar, which rose towards the midpoint of a daily trading range as bond auctions and large listings in the local stock market sucked cash from the local market.

The local dollar also strengthened as the city was roiled by violent protests against an extradition bill that would allow people to be sent to mainland China.


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Dollar slips as weak data boosts US rate cut bets

The dollar edged away from two-year highs on Friday after weak U.S. manufacturing activity data sparked worries that the trade conflict with China may hurt the world’s largest economy and affect the currency’s safe-haven status. The fall followed overnight data showing manufacturing activity hit its lowest level in almost a decade in May, suggesting a sharp slowdown in U.S. economic growth was under way. Escalating trade tensions and weak data have fuelled rate cut expectations from the Fed. Mon


The dollar edged away from two-year highs on Friday after weak U.S. manufacturing activity data sparked worries that the trade conflict with China may hurt the world’s largest economy and affect the currency’s safe-haven status. The fall followed overnight data showing manufacturing activity hit its lowest level in almost a decade in May, suggesting a sharp slowdown in U.S. economic growth was under way. Escalating trade tensions and weak data have fuelled rate cut expectations from the Fed. Mon
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Dollar slips as weak data boosts US rate cut bets

The dollar edged away from two-year highs on Friday after weak U.S. manufacturing activity data sparked worries that the trade conflict with China may hurt the world’s largest economy and affect the currency’s safe-haven status.

Against a basket of six major currencies, the dollar was down 0.2% at 97.686 in early European trade and 0.7% off a two-year high of 98.371 hit the previous session.

The fall followed overnight data showing manufacturing activity hit its lowest level in almost a decade in May, suggesting a sharp slowdown in U.S. economic growth was under way.

Up to now, the bulk of the pain from the trade war has been felt in Asia, with economies from Singapore to Thailand all posting poor numbers.

“Lot of people for good reasons thought trade wars may be U.S. dollar-positive and other countries cannot retaliate,” said Commerzbank FX strategist Ulrich Leuchtmann.

“But in reality, it’s more difficult. This very disappointing PMI data and other factors like the Huawei story are all creating stress for the U.S. economy and derailing sentiment.”

President Donald Trump said on Thursday that U.S. complaints against Huawei Technologies Co Ltd might be resolved within the framework of a U.S.-China trade deal, while at the same time calling the Chinese telecommunications giant “very dangerous”.

Escalating trade tensions and weak data have fuelled rate cut expectations from the Fed. Money markets broadly expect one rate cut by October followed by another by January 2020.

The dollar weakness helped sterling recover slightly from a 4-1/2 month low while the euro briefly inched above $1.12 to hit a one-week high.

Against the yen, the dollar edged down to 109.50 yen, extending losses overnight, when it gave up two-thirds of a percent, its steepest drop in a single session in two months.

The euro might have also been helped by the Dutch part of the EU parliamentary elections, in which an exit poll showed the Labour party of European Commissioner Frans Timmermans won a surprise victory over a Eurosceptic challenger who had been topping opinion surveys.

The euro has been pinned lower in recent weeks by the prospect of Eurosceptic parties across the continent performing well in the elections.


Company: cnbc, Activity: cnbc, Date: 2019-05-24
Keywords: news, cnbc, companies, slips, rate, twoyear, overnight, cut, yen, trade, dollar, hit, weak, data, boosts, bets, euro


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Yen stronger against dollar, volatility bets jump on tariff threats

The U.S. dollar weakened against the Japanese yen on Tuesday as foreign exchange traders sought out safe-haven assets and placed bets on increasing currency volatility after President Donald Trump threatened to impose additional tariffs on Chinese goods. The demand for yen bolstered the volatility index measuring moves in and out of the Japanese currency. The Chicago Board Options Exchange’s Japanese Yen Volatility Index was last up 12.67%. The British Pound Volatility Index was last up 3.52%. T


The U.S. dollar weakened against the Japanese yen on Tuesday as foreign exchange traders sought out safe-haven assets and placed bets on increasing currency volatility after President Donald Trump threatened to impose additional tariffs on Chinese goods. The demand for yen bolstered the volatility index measuring moves in and out of the Japanese currency. The Chicago Board Options Exchange’s Japanese Yen Volatility Index was last up 12.67%. The British Pound Volatility Index was last up 3.52%. T
Yen stronger against dollar, volatility bets jump on tariff threats Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-07
Keywords: news, cnbc, companies, dollar, investors, jump, higher, index, volatility, exchange, stronger, chinese, yen, bets, foreign, threats, tariff, japanese


Yen stronger against dollar, volatility bets jump on tariff threats

The U.S. dollar weakened against the Japanese yen on Tuesday as foreign exchange traders sought out safe-haven assets and placed bets on increasing currency volatility after President Donald Trump threatened to impose additional tariffs on Chinese goods.

The yen was trading at its strongest since March 28, last at half a percent better on the day at 110.20 per dollar. The Swiss franc and longer-dated Treasury bond prices were also buoyed as investors moved into high-quality assets.

“The primary story continues to be the U.S.-China trade agreement. Everyone is focused on that,” said Thierry Wizman, global interest rates and currencies strategist at Macquarie Group.

The demand for yen bolstered the volatility index measuring moves in and out of the Japanese currency. The Chicago Board Options Exchange’s Japanese Yen Volatility Index was last up 12.67%.

The price on other currency-related volatility products also rose. The euro index was up 4.75% on Tuesday and up 11.17% from Friday. The British Pound Volatility Index was last up 3.52%.

“Given investors have been selling volatility since January, they have probably sold more than they wanted and are now scrambling in the opposite direction,” said Wizman.

Traders are “trying to cover their short volatility plays, trying to protect themselves with some optionality, sending foreign exchange vols higher and obviously sending the dollar higher against some of the key pairs,” he added.

Trump tweeted on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25% from 10% by the end of the week and would “soon” target the remaining Chinese imports with tariffs.

But top Chinese negotiator Vice Premier Liu He will head to Washington this week for talks, and some investors have interpreted Trump’s threat as a negotiating tactic.

Although volatility indexes were higher, most moves in currencies were muted. After a bout of nerves Monday immediately following Trump’s comments, foreign exchange traders expressed no fresh panic on Tuesday at the prospect of a breakdown in negotiations between China and the United States.

“As long as the talks continue, the market will remain relaxed … that there will be a deal after all,” said Esther Reichelt, currency analyst at Commerzbank.

The offshore yuan on Monday had been on course for its worst daily drop in 10 months, briefly touching a four-month low of 6.8218, but it later recovered some of those losses while remaining under pressure. It was last down 0.43% at 6.801 yuan per dollar.

The dollar index was 0.08% higher, last at 97.60, with the dollar 0.10% stronger against the euro at $1.118 .


Company: cnbc, Activity: cnbc, Date: 2019-05-07
Keywords: news, cnbc, companies, dollar, investors, jump, higher, index, volatility, exchange, stronger, chinese, yen, bets, foreign, threats, tariff, japanese


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