2025-08-28 14:49

LONDON, Aug 28 (Reuters) - Sterling edged up against a weakening dollar on Thursday as traders continued to worry about threats to the U.S. central bank's independence. The pound was 0.17% higher on the day at $1.3502, and set for a 2.4% monthly rise against the dollar in September. The U.S. currency has been under pressure from President Donald Trump's ramped-up campaign to exert more influence at the Federal Reserve. Sign up here. Fed Governor Lisa Cook asked a U.S. judge to issue a temporary order declaring that Trump's effort to fire her is unlawful and to bar the Fed from taking steps to remove her. Sterling has also had some support by a pullback in expectations of rate cuts by the Bank of England and buoyant economic data. Money markets expected the BoE to keep rates unchanged at 4% when it meets in September. BoE Monetary Policy Committee member Catherine Mann said on Tuesday that she saw a strong case to keep the Bank Rate on hold for a prolonged period but stood ready to cut rates forcefully if downside risks to growth materialise. "Since the beginning of the year, the pound has tended to move sideways against the G10 currency average, while the U.S. dollar has depreciated significantly," said Michael Pfister, FX analyst at Commerzbank, mentioning concerns about the independence of the Fed as bad news for the dollar. Commerzbank has changed positioning around sterling saying in a note on Thursday that the risks of a weaker pound are increasing amid a difficult upcoming autumn budget, persistent UK inflation and cooled-down labour market. "The latest data makes it clear that the United Kingdom is in a difficult situation, and our previously rather optimistic view of the pound is probably no longer justified," Pfister said. British producer output price inflation rose to a two-year high of 1.9% in June, up from 1.3% in May, according to preliminary official data released on Wednesday, which adds to signs of inflationary pressures facing the British economy. Earlier this month the BoE revised up its near-term inflation forecast to 4% for September and forecast that inflation would not be back at its 2% target until the second quarter of 2027. Against the euro, sterling was 0.2% higher at 86.40 pence . https://www.reuters.com/markets/europe/sterling-rises-against-weakening-dollar-traders-focus-fedtrump-2025-08-28/

2025-08-28 12:54

Aug 28 (Reuters) - Jack Daniel's maker Brown-Forman (BFb.N) , opens new tab beat Wall Street estimates for first-quarter sales on Thursday, on the back of steady demand for its ready-to-drink beverages and spirits. Shares of the company rose about 4% in premarket trading, having also reiterated its annual forecast. Sign up here. The popularity of the company's premium-priced whiskey brands, Jack Daniel's, Old Forester and Woodford Reserve, among people with more expendable income, especially in emerging markets, helped the company offset soft demand for its spirits in the U.S. market. However, President Donald Trump's plans to double tariffs on steel and aluminum imports to 50% could risk the margins of its canned ready-to-drink products, alongside challenges from Brown-Forman's reliance on Mexico, which made up 7% of its 2024 sales. Brown-Forman said sales in international markets were hit in the quarter due to the absence of American-made alcohol from retail shelves in most Canadian provinces. The company reiterated that the operating environment for fiscal year 2026 will continue to be challenging, "with low visibility due to macroeconomic and geopolitical volatility" and face "headwinds from consumer uncertainty and the potential impact from currently unknown tariffs". Organic sales in the United States fell 2% in the quarter, compared with a 4% drop a year earlier. Overall, organic sales, which exclude the impact of acquisitions and divestitures, was up 1%, compared with a 4% decline a year earlier. Net sales for the quarter ended July 31 fell 3% from a year earlier to $924 million, compared with estimates of $909.2 million. On an adjusted basis, the company earned 36 cents per share, in line with analysts estimates according to data compiled by LSEG. https://www.reuters.com/business/retail-consumer/jack-daniels-maker-brown-forman-posts-quarterly-sales-beat-2025-08-28/

2025-08-28 12:44

Wall street poised for steady open, Nvidia shares dip Dollar lower as focus turns to Fed policy easing Odds of September Fed rate cut at 87% MUMBAI, Aug 28 (Reuters) - Global equities were steady on Thursday with Wall Street headed for a quiet open while the dollar slipped as traders firmed wagers that the Federal Reserve will cut interest rates next month. Equity futures pointed to a steady start for S&P 500 and the tech-heavy Nasdaq despite a wobble in Asian and European tech stocks following bellwether Nvidia's (NVDA.O) , opens new tab results. Sign up here. Nvidia's shares were down around 1.5% in U.S. pre-market trading as uncertainty over its China businesses clouded a better-than-expected revenue forecast for the next quarter. Semiconductor stocks in Europe traded mixed as investors parsed the firm's outlook which also weighed on tech-sector stocks in Asia. Shares of Taiwan Semiconductor Manufacturing Company (2330.TW) , opens new tab declined 2.5%. Nvidia's outlook was above consensus analyst expectations but also disappointed investors accustomed to blowout results. Broader European stock indexes were choppy with the pan-European Stoxx 600 (.STOXX) , opens new tab down about 0.3%, reversing early gains. Futures tracking the rate-sensitive U.S. Russell 2000 small-caps index were up 0.7%. Money markets are pricing in an over 85% chance of a rate cut by the Federal Reserve next month. The rate cut wagers have weighed on the dollar this month, pushing it down 2% against a basket of peers. It was last down 0.2% at 97.9. "Unless we see a very robust employment report in early September, I think the Fed is going to start to cut rates," said Lee Hardman, senior currency analyst at MUFG. Earlier this week, President Donald Trump said he is firing Federal Reserve Governor Lisa Cook, ramping up his campaign to assert influence on the central bank which left some investors worried about the political influence on monetary policy decisions. Cook will file a lawsuit to prevent President Donald Trump from firing her, a lawyer for the embattled central bank official said on Tuesday. "This week’s events underline our view that the FOMC may continue to resist delivering the amount of rate cuts that President Trump desires this year, but next year it will be increasingly difficult to keep White House influences from policy rate decisions," Philip Marey, senior U.S. strategist at Rabobank said in a note. Elsewhere, concerns over France's fiscal path are likely to stay in focus for regional markets following Prime Minister Francois Bayrou's gamble to win backing for his deeply unpopular debt-reduction plan via a confidence vote next month. France's 10-year government bond yield eased slightly on Thursday but remained close to its highest level since March. The spread between the 10-year benchmark bund and its French counterpart eased slightly after hitting a seven-month peak of nearly 83 basis points in the previous session. Developments in France are "putting a bit of a dampener on upside potential for euro-dollar but for us the bigger story is obviously what could happen with the Fed," Hardman said. On Thursday, the single currency was up 0.2% at $1.1667 while sterling was up 0.1% at $1.3515. Against the Japanese yen, the dollar slipped 0.3% to 146.93 yen. The interest-rate-expectation sensitive 2-year U.S. Treasury yield was at 3.6290%, down 6 basis points on the week and hovering close to its lowest level since late-April. In commodities markets, spot gold held firm near a more-than-two-week peak on Thursday and was last up 0.2% at $3,405.56. https://www.reuters.com/world/china/global-markets-wrapup-4-2025-08-28/

2025-08-28 12:43

Some see inflation risks tilted to downside, others see resilience U.S. tariffs and euro appreciation impact debated by ECB policymakers FRANKFURT, Aug 28 (Reuters) - European Central Bank policymakers were divided on whether inflation was more likely to come in higher or lower than expected when they met in July, ECB accounts showed on Thursday, in a foretaste of a debate set to come to a head in the coming months. The ECB left its key rate at 2% at its July 23-24 meeting and it will probably do so again next month before discussions about further cuts likely resume in the autumn, especially if the economy weakens under U.S. tariffs, sources have told Reuters. Sign up here. The accounts of the July meeting showed governors agreed on the value of waiting for a trade deal between the European Union and the United States but they were split on the balance of risks to inflation. "Several members viewed inflation risks as tilted to the downside relative to the June staff projections, at least for the next two years," the ECB said. They said U.S. tariffs appeared likely to be higher than the 10% incorporated in the ECB's projections while other countries may divert more of their exports to the euro area. Meanwhile, inflation expectations for next year were below 2% even with one more rate cut already priced in. One policymaker explicitly said that one more cut would be justified at the July meeting "owing to increasing downside risks to output and inflation". Yet "a few" of their colleagues took the opposite view, saying the economy was more resilient than expected, services inflation still high and tariffs may disrupt supply. "Moreover, it was argued that the projections could be underestimating the inflationary effects of the global fiscal expansion," some members said, according to the ECB account. Data since the July meeting confirmed the euro zone economy was holding up while inflation hovered at the ECB's 2% target. Meanwhile tariffs imposed by U.S. President Donald Trump's administration on EU goods imports, at 15% for most goods, were close to the ECB's own expectations and averted the most pessimistic scenarios. Already in July ECB policymakers were resigned to the idea that policy uncertainty "would remain a key feature of the global and euro area economic outlook for some time to come", but they disagreed on how big its impact would be on the economy. They said the euro's appreciation, particularly against the dollar, since Trump first unveiled his tariff plans in April had "a structural dimension" and was "unlikely to reverse in the near term". But some policymakers said the knock-on effect on prices should be small. It was argued that the pass-through to consumer prices was likely to be limited as the dampening effect from lower import prices might be partly offset by stronger price pressures from rising domestic demand, the ECB said. https://www.reuters.com/business/finance/ecb-policymakers-split-risks-inflation-july-accounts-show-2025-08-28/

2025-08-28 12:36

Towns face floods if barrage crumbles on swollen Chenab river India's dam water release worsens Pakistan's flood crisis Monsoon floods kill 805 in Pakistan, 60 in Indian Kashmir LAHORE/SRINAGAR, Aug 28 (Reuters) - Pakistan's eastern towns of Chiniot and Hafizabad face a risk of catastrophic floods if an irrigation barrage crumbles on a major river upstream after heavy rains swelled it beyond capacity, officials warned on Thursday. Nuclear-armed neighbours India and Pakistan are battling torrential monsoon rains that have unleashed flash floods, swelled rivers and filled dams, with 60 deaths this month in Indian Kashmir, and Pakistan's toll at 805 since late June. Sign up here. Any flooding blamed on India stands to inflame relations between the archfoes, embroiled in a tense stand-off since a brief conflict in May that was their worst fighting in decades. The waters of the Chenab river in Pakistan's sprawling province of Punjab threatened to burst through a 3,300-foot (1,000-m) concrete barrage at Qadirabad that regulates flows, siphoning them into a canal irrigation network. "It is a crisis situation," said a technical expert at the National Disaster Management Authority, adding that the collapse of the barrage could wash away the towns, home to more than 2.8 million. "Under the constant supervision of experts and administration, the water level is receding, but it is still not beyond danger levels," added the official, who sought anonymity as he was not authorised to speak to the media. The threat comes as India's release of excess water this week from its dams swelled river flows downstream in its neighbour's breadbasket province of Punjab, home to half the population of 240 million. Authorities said Pakistan evacuated more than 210,000 villagers near the rivers Ravi, Sutlej and Chenab that flow in from India, where heavy rain battered the northern region of Jammu, killing 60 people this month. India routinely releases water from its dams when they get too full, with the excess flowing into Pakistan, accompanied by warnings from New Delhi, which calls them a humanitarian measure. On Thursday, Pakistani officials said India passed on its third flood warning since Sunday, this time for the Sutlej, while the previous two concerned waters heading into Pakistan on the Ravi. India's water resources ministry did not immediately respond to a Reuters request for comment on the matter. More than 900,000 cusec of water passed through the Qadirabad distribution structure on the Chenab river, or 100,000 cusec in excess of its capacity, the provincial disaster management authority said. A cusec is a flow of volume equivalent to one cubic foot, or 28 cubic litres, every second. On Wednesday, authorities blew up part of the riverbank to release some water before it reached the barrage. Twelve people had been killed this week in Punjab, said Marriyum Aurangzeb, a senior minister in the provincial government. "As one nation, we will face this challenge together," said Aurangzeb, standing on the banks of the swollen Ravi. "There is no need to panic." The waters of Pakistan's eastern rivers join those of northern rivers in Punjab in the giant Indus river, to flow through the province of Sindh before emptying into the sea. On the other side of the border, Himalayan river levels began to recede after days of heavy rains that triggered landslides and flooding in both countries, with forecasters expecting downpours to subside from Thursday. https://www.reuters.com/sustainability/climate-energy/two-pakistan-towns-face-flood-risk-if-river-barrage-crumbles-officials-say-2025-08-28/

2025-08-28 12:35

US dollar index down 0.3% US PCE data due on Friday US inflation overshoot could weigh on gold, analyst says Aug 28 (Reuters) - Gold prices rose on Thursday, hitting an over one-month high, as the dollar softened while investors hunkered down for Friday's U.S. inflation data for cues on the Federal Reserve's policy path. Spot gold was up 0.3% at $3,407.81 per ounce at 1222 GMT, after hitting $3,408.62, its highest level since July 23, earlier in the session. Sign up here. U.S. December gold futures rose 0.5% to $3,466.30. The dollar index (.DXY) , opens new tab was down 0.3% against a currency basket, making gold more attractive for holders of other currencies. Investors are awaiting Friday's release of the Personal Consumption Expenditures (PCE) Price Index, which is the Fed's preferred inflation measure. Economists polled by Reuters expect the index (USPCEY=ECI) , opens new tab to rise 2.6% in July, matching the June figure. "A surprise to the upside would likely strengthen the dollar and increase Treasury yields, weighing on gold prices," said Ricardo Evangelista, senior analyst at ActivTrades. "The opposite outcome could fuel expectations of a more dovish Fed, softening the dollar and supporting the precious metal." Markets expect a more than 87% chance of a 25-basis-point rate cut at the Fed's policy meeting next month, according to CME FedWatch Tool. Non-yielding gold typically performs well in a low-interest-rate environment. New York Fed Bank President John Williams said on Wednesday that interest rates could fall at some point, but policymakers will need to gauge upcoming data. Traders are also watching U.S. President Donald Trump's moves to assert control over the Fed. Earlier this week, Trump said he was firing Fed Governor Lisa Cook. "Many see the dispute as a threat to the Fed's independence and credibility, which is supportive for the precious metal," said Evangelista. Elsewhere, spot silver was up 1.2% at $39.08 per ounce, platinum rose 0.2% to $1,349.22 and palladium climbed 1.1% to $1,103.82. https://www.reuters.com/markets/europe/gold-hits-over-one-month-peak-lower-dollar-us-inflation-data-focus-2025-08-28/