2025-07-30 05:24
Euro down 1.9% in July, dollar index set for monthly gain U.S.-China talks constructive but no major breakthroughs Spotlight on Fed and Powell later on Wednesday Yen firms after tsunami warning, BOJ due on Thursday SINGAPORE, July 30 (Reuters) - The U.S. dollar wobbled near a one-month high on Wednesday ahead of the Federal Reserve's policy decision, while the euro was poised to snap its run of six straight monthly gains as investors counted the cost of the U.S.-EU trade pact. The Japanese yen firmed against the dollar after a powerful earthquake struck off Russia's Far Eastern Kamchatka Peninsula and generated a tsunami, prompting evacuation warnings in the area and across most of Japan's east coast. Sign up here. Currency markets were mostly steady as investors were hesitant to place bets before crucial economic reports and central bank meetings in Canada, Japan and the United States. U.S. and Chinese officials agreed to seek an extension of their 90-day tariff truce, following two days of what both sides described as constructive talks in Stockholm. No major breakthroughs were announced and U.S. officials said it was up to President Donald Trump to decide whether to extend a truce that expires on August 12. The Sino-U.S. talks come after a framework deal between the U.S. and EU was announced on Sunday. The accord has evoked a mix of relief and concern from Europe, as the agreement was lopsided and skewed towards the United States. Investors have been keeping an eye on the trade pacts as countries scramble to get deals over the line before the August 1 deadline set by U.S. President Donald Trump. "Markets seem to be increasingly interpreting trade agreements as symbolic and tactical rather than structural resolution," said Charu Chanana, chief investment strategist at Saxo in Singapore. "With terms often vague and enforcement mechanisms weak, investors are assigning lower market beta to these negotiations unless backed by concrete detail." The euro firmed a bit to $1.1555 after dropping for the first two days of the week and hitting a one-month low of $1.15185 on Tuesday. The euro is up 11.7% since the start of the year but on course for its first monthly drop this year. The single currency has benefited this year from the dollar losing its lustre due to Trump's erratic trade policies, prompting investors to look for alternatives. Sterling was at $1.3355. The Australian dollar last bought $0.6514, steady on the day, after a set of surprisingly soft inflation figures that only cemented expectations for an interest-rate cut next month. The dollar index , which measures the U.S. currency against six others, was at 98.823, hovering near a one-month high and on course to post its first month of gains this year. Investor focus will now switch to central bank meetings, with the Fed widely expected to stand pat on rates later on Wednesday, making comments from Chair Jerome Powell crucial to gauge the policy path. The meeting comes in the wake of Trump's constant demands for rate cuts, which have coincided with an unrelenting campaign of attacks on Powell by the president and administration officials. There is speculation that Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman could issue dissents if the Fed on Wednesday holds the policy rate steady for the fifth time since December. Both were appointed by Trump as was Powell. "While dissenting isn't uncommon, the dissents at this week's meeting may get more focus because Trump has made it crystal clear that he thinks the FOMC should be lowering interest rates," said Kristina Clifton, a senior economist at the Commonwealth Bank of Australia in Sydney. "Dissents at this meeting may be judged as political and put a dent in perceptions of the FOMC's independence." The BOJ is also expected to stand pat and the spotlight will be on comments from Governor Kazuo Ueda as investors hope the recent trade deal between Japan and the U.S. paves the way for the central bank to raise interest rates again this year. The yen firmed 0.4% to 147.85 per dollar and was last at 148.06 after news broke about the Pacific earthquake and tsunami, with investors on alert for any damage to key infrastructure in Japan. Christopher Wong, currency strategist at OCBC, said the yen strength was in reaction to earthquake-related headlines and probably exacerbated by thin market liquidity. "The Nightmare of 2011 Tohoku earthquake lingers," he said, referring to the earthquake and tsunami that devastated northeastern Japan in March 2011. In cryptocurrencies, bitcoin was 0.5% higher at $118,042.85, while ether rose 1.2% to $3,808.81. https://www.reuters.com/world/middle-east/dollar-drifts-before-fed-euro-set-first-monthly-drop-this-year-2025-07-30/
2025-07-30 04:47
A look at the day ahead in European and global markets from Gregor Stuart Hunter: Hope you've had your coffee. We have a lot to get through. Sign up here. The next 72 hours will see traders run a gauntlet of risk events that features central bank decisions from the Federal Reserve, Bank of Canada and Bank of Japan, corporate earnings, and culminates in U.S. President Donald Trump's August 1 tariff deadline. Markets are displaying cautious optimism ahead of the data deluge and after trade talks between the U.S. and China ended on an upbeat note - though without any substantive agreement. Asian stocks are pushing higher, led by gains in Korea (.KS11) , opens new tab, while the Shanghai Composite (.SSEC) , opens new tab is on track to enter a technical bull market, up 20% from a low in April. Elsewhere, a powerful magnitude 8.8 earthquake struck Russia's Far Eastern Kamchatka Peninsula - the strongest to hit the region in more than seven decades - prompting warnings and evacuations stretching across the Pacific Ocean as far as California. Some safe haven currencies rallied after the news, with the Japanese yen as much as 0.4% stronger and the Swiss franc appreciating up to 0.3%. The euro is 0.2% firmer against the dollar, recovering some ground as the European single currency closes in on its first monthly loss of this year as markets weigh up the EU's trade deal with the U.S.. Traders are also braced for a slew of corporate earnings, including from tech megacaps Microsoft (MSFT.O) , opens new tab and Meta (META.O) , opens new tab and European stocks, including UBS Group (UBSG.S) , opens new tab and GSK (GSK.L) , opens new tab. The Federal Reserve is expected to leave interest rates unchanged at its policy meeting later on Wednesday, though it could see a rare dissent by some central bank officials in favour of lower borrowing costs. And ahead of Trump's deadline to reach a deal to avert the imposition of "Liberation Day" tariffs, some countries' talks with the U.S. - including China, India and South Korea - look set to go down to the wire. Buckle up. Key developments that could influence markets on Wednesday: European earnings: UBS Group, Banco Santander, GSK, Telefonica US earnings: Microsoft, Meta, Qualcomm, ARM, Ford French: Consumer spending for June and preliminary GDP for Q2 German: Retail sales for June, GDP flash for Q2 Euro zone: GDP flash for Q2 UK: 27-year government debt auction US: Federal Reserve interest rate decision, GDP growth rate for Q2 Canada: Bank of Canada interest rate decision Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here. https://www.reuters.com/world/europe/global-markets-view-europe-2025-07-30/
2025-07-30 04:12
MUMBAI, July 30 (Reuters) - The Indian central bank likely stepped in to support the rupee on Wednesday, five traders told Reuters, as worries over higher U.S. tariff rates on Indian exports pushed the currency to an over four-month low. The rupee was last quoted at 87.11 per U.S. dollar, down 0.3% on the day. The currency was a tad above the day's low of 87.13 hit in early trading. Sign up here. Traders pointed to dollar sales from Indian banks, most likely on behalf of the Reserve Bank of India, which helped limit the rupee's losses. The dollar offers were "not unusually large and intermittent," a trader at a private sector lender said. The dollar index was down 0.1% while Asian currencies were mostly rangebound. (This story has been refiled to say dollars, not dollar, in the headline) https://www.reuters.com/world/india/indian-central-bank-likely-selling-dollars-cap-rupees-losses-traders-say-2025-07-30/
2025-07-30 02:54
MUMBAI, July 30 (Reuters) - The Indian rupee is poised to weaken past the psychologically important 87-per-dollar level on Wednesday after U.S. President Donald Trump pointed to a likely 20%-25% tariff on Indian exports to the U.S., compounding pressure from sustained portfolio outflows. The 1-month non-deliverable forward indicated the rupee will open in the 87.11-87.13 range versus the U.S. dollar, its weakest level in four months. It had closed at 86.8150 on Tuesday. Sign up here. India is preparing to face higher U.S. tariffs, likely between 20% and 25%, on some of its exports, as it holds off on fresh trade concessions ahead of Washington's August 1 deadline, Reuters reported post market-hours on Tuesday. Speaking to reporters, Trump pointed to similar level of tariffs but said that the deal has not been finalised yet. New Delhi plans to resume the trade negotiations when a U.S. delegation visits next month, aiming to finalise a comprehensive bilateral deal by September or October, a government official told Reuters. Trump's remark will cause a "knee-jerk reaction," with traders likely reading it as a negative cue, a trader at a state-run bank said, adding that while India was expected to crack one of the first deals, it now appears to be a laggard. Regional peers like Indonesia and Vietnam and the U.S.'s bigger trading partners like Japan and the European Union have already finalised trade deals with Washington in July. It's "quite likely" the Reserve Bank of India may step in to support the rupee if the early losses extend, the trader said. On the day, the dollar index was a tad lower at 98.7, while most Asian currencies nudged higher. The Federal Reserve's monetary policy decision is due during U.S. market hours later in the day. KEY INDICATORS: ** One-month non-deliverable rupee forward at 87.27; onshore one-month forward premium at 13.25 paise ** Dollar index down 0.1% at 98.75 ** Brent crude futures rises 0.2% to $72.6 per barrel ** Ten-year U.S. note yield at 4.33% ** As per NSDL data, foreign investors sold a net $689 mln worth of Indian shares on July 28 ** NSDL data shows foreign investors sold a net $66.4 mln worth of Indian bonds on July 28 https://www.reuters.com/world/india/rupee-set-deepen-losses-india-braces-higher-us-tariffs-2025-07-30/
2025-07-30 02:22
CPI rises 2.1% y/y in Q2, core inflation slows to 2.7% Home building costs and services ease Reinforces market pricing of 25 bps RBA rate cut in August SYDNEY, July 30 (Reuters) - Australian consumer prices grew at the slowest pace in over four years in the June quarter, data showed on Wednesday, while core inflation hit a fresh three-year low and cemented market wagers for a cut in interest rates next month. The surprisingly benign report will be a huge relief to the board of the Reserve Bank of Australia which paused its easing cycle this month on concerns core inflation would not cool as much as hoped, a shock decision that badly wrong-footed markets. Sign up here. "We believe that the board now has the confirmation it needs to continue on its 'cautious' – if not so predictable – path of removing current monetary restrictiveness," said Luci Ellis, chief economist at Westpac. "We therefore expect it to cut rates by 25 bps at its August meeting," she added. "Further cuts in November, February 2026 and May 2026, also look increasingly likely. Markets now imply a near-100% chance the RBA will cut its 3.85% cash rate by a quarter point when it meets on August 12, and continue easing to 3.10% or lower by year-end. With a cut long priced in, the data did little damage to the Australian dollar which held at $0.6512 . The report certainly supported the doves as the main trimmed mean measure of core inflation rose 0.6% in the June quarter, below forecasts of 0.7%. That took the annual pace to 2.7%, down from 2.9% in the March quarter and nearer the mid-point of the RBA's target band of 2% to 3%. This underlying measure is favoured by policy makers as it strips out volatile one-off shifts in prices. The headline consumer price index rose 0.8% in the quarter, nudging the annual pace down to 2.1% from 2.4%, the lowest reading in more than four years. This measure has been held down by government rebates on electricity and child care, which will soon drop out of the series and likely see the CPI temporarily rise back toward 3%. A monthly measure of the CPI actually showed annual price growth dropped to just 1.9% in June, putting it under the RBA's target band. Details of the report showed the largest price gains in the June quarter came in clothing, electricity and health care, but gains elsewhere were much more modest. Crucially for the RBA, the cost of new housing eased markedly as project home builders responded to subdued demand with incentives and promotional offers. Annual inflation in new dwellings slid to just 0.7% in the second quarter, from 1.6% the previous quarter and a top of almost 21% back in 2022. There was also a welcome slowdown in the services sector, which has proved more stubborn than for goods which are open to international competition. Annual services inflation dropped to 3.3% in the June quarter, led by rents and insurance. The cool down has been helped by a pullback in wage growth and a loosening in the labour market, where the jobless rate hit a 3-1/2 year high of 4.3% in June. https://www.reuters.com/world/asia-pacific/australia-q2-inflation-surprises-low-side-heralds-rate-cut-2025-07-30/
2025-07-30 00:47
Policy unchanged after two easings this year Central bank says it is in able to respond to risks MAS keeping ammunition dry, economist says Economic prospects subject to significant uncertainty SINGAPORE, July 30 (Reuters) - Singapore's central bank on Wednesday kept its monetary policy settings unchanged after economic growth surprised to the upside in the second quarter. The Monetary Authority of Singapore said it will maintain the prevailing rate of appreciation of its exchange rate-based policy band. Sign up here. The width and the level at which the band is centred were unchanged. "The risk of a sharp step-down in global growth in the near-term has receded along with the general de-escalation in trade tensions as well as more benign financial conditions since April," the MAS said in a statement. It added it was in an appropriate position to respond to risks after two previous easings. OCBC economist Selena Ling said the MAS was keeping its ammunition dry and waiting to see the outcome of reciprocal tariffs given the two-way risks for inflation. "Tariff impact on Chinese exports to rest of the world may be disinflationary, but geopolitics and supply chain recalibrations may be inflationary, so the net impact still has to be assessed," said Ling. Half of the 12 analysts polled by Reuters ahead of the review expected the MAS to keep policy settings unchanged while the other half forecast an easing of policy. The MAS eased monetary policy in January and April this year on growth concerns due to U.S. tariffs after holding settings since a tightening in October 2022. The economy, however, is posting better-than-expected results as exporters rushed out goods to beat the imposition of U.S. tariffs. Singapore avoided a technical recession after the economy grew 1.4% quarter-on-quarter in the second quarter, according to preliminary government data. Authorities in Singapore have warned that growth is likely to slow in the second half of 2025 as the export and production frontloading tapers off. "Prospects for the Singapore economy remain subject to significant uncertainty, especially in 2026," the MAS said on Wednesday. In April, the government reduced its GDP forecast to 0.0% to 2.0% from 1.0% to 3.0%. Core inflation in the city-state fell to 0.6% year-on-year in June from a peak of 5.5% in early 2023. Instead of using interest rates, Singapore manages monetary policy by letting the local dollar rise or fall against the currencies of its main trading partners within an undisclosed trading band, known as the Singapore dollar nominal effective exchange rate, or S$NEER. It adjusts policy via three levers: the slope, mid-point and width of the policy band. https://www.reuters.com/world/asia-pacific/singapore-keeps-monetary-settings-unchanged-trade-tensions-ease-2025-07-30/
