2025-07-17 18:50
Dollar firms against major peers Fed Chair Powell's future in focus Japan's political shift weighs on yen NEW YORK, July 17 (Reuters) - The dollar rebounded broadly on Thursday following a turbulent session on Wednesday when U.S. President Donald Trump denied reports that he was planning to fire Federal Reserve Chair Jerome Powell. The dollar has rallied this month in what analysts say is largely consolidation following a sharp selloff for most of this year. The dollar index remains down 9% year-to-date. Rising Treasury yields this month are supporting the dollar’s rebound. Sign up here. “After having a historic sell-off in the first half, the dollar has begun the second half on firmer footing. It looks like mostly short covering backed by these firmer U.S. interest rates,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. The dollar extended gains on Thursday after data showed U.S. retail sales rebounded more than expected in June, while the number of Americans filing new applications for jobless benefits fell last week. However, the greenback quickly fell back to trade close to where it was before the data, which Chandler said shows “the lack of near-term conviction.” Investors are weighing multiple factors that could influence market direction, including the economic impact of Trump’s tariff policies, the U.S. fiscal and debt outlook, and the Fed’s independence. The dollar tumbled on Wednesday on reports that Trump was planning to fire Powell soon, before paring losses when Trump denied the news. Trump has said repeatedly that interest rates should be at 1% or lower. Former Fed Governor Kevin Warsh, seen as a potential successor to Powell, said on Thursday there needs to be a new accord between the Treasury Department and the U.S. central bank, referencing a 1951 pact that separated federal debt management from monetary policy. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.41% on the day at 98.75, with the euro down 0.45% at $1.1582. The single currency earlier reached $1.1555, the lowest level since June 23. In other currencies, sterling weakened after data showed British pay growth slowing in May and employee numbers dropping further last month. The British pound was last down 0.1% at $1.3405. Concerns also mounted over a pivotal election in Japan and a still elusive trade deal with the U.S. to avoid a punishing rise in tariffs. Polls showed Prime Minister Shigeru Ishiba's coalition was in danger of losing its majority in the upper house. Japan's top trade negotiator, Ryosei Akazawa, held talks with U.S. Commerce Secretary Howard Lutnick on tariffs on Thursday, as Tokyo races to avert a 25% levy that will be imposed unless a deal is clinched by an August 1 deadline. The yen weakened 0.58% against the greenback to 148.73 per dollar after touching its weakest level since April 3 in the previous session . The Australian dollar slid after jobs data badly missed forecasts and unemployment hit highs not seen since late 2021. The Aussie was last down 0.64% versus the greenback at $0.6484. In cryptocurrencies, bitcoin fell 0.22% to $119,676. https://www.reuters.com/world/middle-east/dollar-gains-broadly-yen-dips-before-election-japan-election-2025-07-17/
2025-07-17 18:27
Tariffs' impact on inflation less than expected, Daly says She says rates will need to fall as inflation drops to avoid harming labor market Markets expect no change in rates at Fed's July 29-30 meeting July 17 (Reuters) - San Francisco Federal Reserve President Mary Daly reiterated on Thursday it is "reasonable" to expect two interest rate cuts before the end of this year, particularly with the impact of President Donald Trump's tariffs looking more muted than originally expected. Inflation is still above the U.S. central bank's 2% target and there's still "some work to do" to bring it down, Daly said at the Rocky Mountain Economic Summit in Victor, Idaho. But the Fed also doesn't want to keep rates restrictive for too long because that would unnecessarily hurt the labor market, she said. Sign up here. "I don't think we need to slow precipitously to produce the last mile on inflation," Daly said. "I wouldn't want to see more weakness in the labor market ... I really wouldn't want to see that, which is why you can't wait forever" on cutting rates. Companies are figuring out ways to avoid tariffs and are not passing on all of their increased costs to their customers, and despite a doubling of the effective average tariff rate under Trump the increased levies on imports are not so far spilling more broadly into overall inflation. "We haven't seen any evidence that that's occurring," Daly said, though recent consumer price data does show the price of goods is rising. Offsetting that, however, is encouragingly lower inflation in non-housing-related services inflation, she said. Asked if she would support reducing the current policy rate range of 4.25%-4.50% when the Fed meets in two weeks, Daly noted that she expects rate cuts to resume as inflation falls, with the policy rate at an ultimate settling point of 3% or somewhere higher than that level. "Whether it happens in July or September or some other month is really not the most relevant piece," she said. More relevant, Daly added, is that rates will be reduced. "We don't want to unnecessarily tighten the economy in a way that hurts the labor market or growth. So that's the direction of travel," she said. Two of the Fed's 19 policymakers have said they believe a July rate cut could be appropriate; others have signaled they expect it to take longer to be able to judge the effect of the tariffs and other Trump policies on inflation and the labor market, and therefore to know if a rate cut would be appropriate. Financial markets reflect very little expectation for a rate cut at the Fed's July 29-30 meeting, with bets focused on the September 16-17 meeting as a much more likely time for the policy easing to resume. Trump has waged an escalating pressure campaign on Fed Chair Jerome Powell to cut rates immediately and raised the possibility of replacing him before his term as U.S. central bank chief expires next May. Powell has repeatedly said he intends to finish out his term as Fed chief. Daly declined to comment specifically about Trump's comments, but noted that all Fed policymakers participate in interest rate decisions. "We share equal responsibility when we take that vote" on rates, Daly said. https://www.reuters.com/business/feds-daly-says-reasonable-expect-two-rate-cuts-before-end-2025-2025-07-17/
2025-07-17 18:19
Mark Johnson led an HSBC foreign exchange desk Johnson accused of "front-running' Cairn Energy trade Fraud theories underlying conviction invalid or weak US Attorney's office in Brooklyn declined to comment NEW YORK, July 17 (Reuters) - A U.S. appeals court on Thursday voided the 2017 fraud conviction of a former HSBC (HSBA.L) , opens new tab executive who spent two years in prison for "front-running" a British oil and gas exploration company's $3.5 billion currency trade. In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan said Mark Johnson's conviction was tainted because the Supreme Court in an unrelated case later repudiated a fraud theory that underlay it. Sign up here. The appeals court also expressed "grave doubt" Johnson could have been convicted under an alternative theory that he defrauded HSBC client Cairn Energy, now known as Capricorn Energy (CNE.L) , opens new tab. A spokesman for the U.S. attorney's office in Brooklyn declined to comment. "We are delighted that justice has finally been achieved for Mark Johnson," his lawyer Alexandra Shapiro said in a statement. "Mr. Johnson carried out the Cairn transaction consistent with industry practice and in violation of no law or rule." Johnson, a British father of six in his late 50s, had been the head of HSBC's global foreign exchange cash trading desk. He was the first banker tried in the United States on currency rigging charges, following global probes into the multitrillion-dollar per day currency market. According to prosecutors, Cairn had retained Johnson and another former HSBC executive in 2011 to convert $3.5 billion into British pounds sterling as it prepared to sell an Indian subsidiary. Prosecutors said the executives quietly bought pounds for HSBC's own accounts before completing Edinburgh-based Cairn's trade, reaping a profit of about $7 million, court papers show. A jury convicted Johnson of wire fraud and conspiracy after a four-week trial. The appeals court upheld the conviction in 2019. But on Thursday, the appeals court said a 2023 Supreme Court ruling, Ciminelli v U.S., meant Johnson could not be convicted of denying Cairn a right to control its assets by reneging on a promise not to ramp up the pound's price. Circuit Judge Guido Calabresi also said evidence that Johnson breached duties to Cairn by misappropriating its confidential information for his own benefit was "weak," and it was unlikely a jury would convict Johnson on that basis alone. "We find ourselves--at the very least--in 'virtual equipoise' as to whether any jury, presented only with the misappropriation theory, would convict Johnson," Calabresi wrote. "That is more than enough to leave us with grave doubt." The appeals court returned the case to U.S. District Judge Nicholas Garaufis, who oversaw the trial. The case is Johnson v. U.S., 2nd U.S. Circuit Court of Appeals, No. 24-1221. https://www.reuters.com/legal/government/hsbc-executives-fraud-conviction-voided-by-us-appeals-court-2025-07-17/
2025-07-17 17:38
July 17 (Reuters) - Crypto firm Bitcoin Standard Treasury Company said on Thursday it is aiming to list on the Nasdaq, with over 30,000 bitcoin on its balance sheet, through a merger with a Cantor Fitzgerald-backed blank check vehicle. The company will merge with Cantor Equity Partners I (CEPO.O) , opens new tab, a special purpose acquisition company backed by Cantor Fitzgerald, which is chaired by Brandon Lutnick, the son of U.S. Secretary of Commerce Howard Lutnick. Sign up here. Bitcoin Standard will be the fourth-largest listed bitcoin treasury, the company said. It is expected to raise up to $1.5 billion in private investment in public equity financing. The move comes months after another Cantor-backed SPAC teamed up with Japanese technology investor SoftBank Group (9984.T) , opens new tab and Tether, the company behind the world's largest stablecoin, for a $3.6 billion crypto venture to buy bitcoin. Several public companies — including Trump Media & Technology (DJT.O) , opens new tab, founded by U.S. President Donald Trump — are now buying cryptocurrencies amid a rally fueled by rising adoption and favorable regulatory changes. Bitcoin, the most popular crypto among corporations, has gained more than 26% this year and vaulted past $120,000 for the first time on Monday. "Crypto treasury strategies are a hot topic we've been strategizing about with some of our family clients," said Michael Ashley Schulman, partner at Running Point Capital Advisors. Strategy (MSTR.O) , opens new tab Chairman Michael Saylor pioneered the treasury approach, which involves hoarding the world's biggest cryptocurrency. As of July 14, Strategy held 601,550 units of bitcoin, making it the biggest corporate holder. In a watershed moment for crypto, the U.S. House of Representatives is expected to soon pass a bill to establish a federal framework for stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg. The combined company will trade on the Nasdaq under the symbol "BSTR" upon deal close, which is expected in the fourth quarter of 2025. https://www.reuters.com/business/crypto-firm-bitcoin-standard-go-public-deal-with-cantor-backed-spac-2025-07-17/
2025-07-17 16:20
United shares rise 3% after upbeat demand commentary Improved geopolitics, economics boosts travel demand outlook Airline industry cuts unprofitable flights to boost fares United plans increased investment in premium products, capacity July 17 (Reuters) - United Airlines (UAL.O) , opens new tab executives said on Thursday the company has seen strong bookings in the past three weeks, with the carrier gaining pricing power for the first time since February. If the trend continues, they expect the company's revised full-year profit estimate would prove to be conservative. Sign up here. On Wednesday, the Chicago-based carrier forecast an adjusted 2025 profit in the range of $9 to $11 per share. "Demand feels to us like it has inflected upward and is returning toward the normal trend line," CEO Scott Kirby told analysts on an earnings call. The upbeat commentary drove up the company's shares 3% higher in mid-day trade. Shares of rivals Delta Air (DAL.N) , opens new tab, American Airlines (AAL.O) , opens new tab and Alaska Airlines (ALK.N) , opens new tab also rose. In April, United took an unusual step of offering two different earnings forecasts as U.S. President Donald Trump's trade war dented consumer and business confidence, making it harder for carriers to predict their business. Kirby said while demand stabilized after the pullback in March and April, it finished the first half about 5 percentage points weaker than the airline's original estimate. Passage of Trump's tax and spending bill and improvements in the geopolitical situation in the Middle East have boosted the travel demand outlook, he said. While there is still little clarity on the tariff front, Kirby said most businesses now have a much better plan to deal with it. "As uncertainty has declined, we've seen an improvement in book revenue, including a double-digit acceleration in business demand," he said. United executives said the industry's efforts to slash unprofitable flights would boost airfares in the second half of the year. Kirby likened the situation to last year when reduced supply of airline seats drove up ticket prices, fueling a rally in airline stocks. "From a supply perspective, it's deja vu all over again," he said. "This is almost the exact same setup that we had a year ago." Still, Kirby expects United and rival Delta to generate the bulk of the industry's profits this year, thanks to a diversified revenue stream, including premium cabins. United's premium cabin revenue was up 6% in the second quarter from a year ago. The gap in premium and non-premium passenger revenue per available seat mile was 6 percentage points. Encouraged by the results, company officials said they plan to further ramp up investments in premium products and capacity in coming years. https://www.reuters.com/business/united-airlines-reports-recovery-bookings-pricing-power-shares-climb-2025-07-17/
2025-07-17 16:02
July 17 (Reuters) - Former Federal Reserve Governor Kevin Warsh, seen as a potential successor to Fed Chair Jerome Powell, said on Thursday there needs to be a new accord between the Treasury Department and U.S. central bank, referencing a 1951 pact that separated federal debt management from monetary policy. Warsh, now a fellow at Stanford University's Hoover Institution, said on CNBC that such an agreement between the two agencies could smooth the process of reducing the Fed's balance sheet by communicating intentions jointly. Sign up here. "If we have a new accord, and ... the Fed chair and the Treasury secretary can describe to the markets plainly and with deliberation this is our objective for the size of the Fed's balance sheet, the Treasury can say this is our issuing calendar, and by the end of, let's say, this administration we'll be at an equilibrium rate on the balance sheet, so that markets will know what is coming," he said. The original accord, struck in March 1951, ended a period when the Fed had committed to a policy of low interest rates at Treasury's request to allow for lower-cost federal borrowing to finance the war effort during World War Two. It is seen by Fed historians as a critical moment that established its practical independence from presidential administrations and laid the ground for how monetary policy would be set in the future. Warsh made his remarks at a time when President Donald Trump is demanding the Fed cut rates, in part to lower the federal government's debt service costs, which topped $1 trillion last year for the first time. Trump has said he will not pick a candidate to succeed Powell who is not on board with the president's desire for rate cuts. The Fed last cut rates in December, before Trump's return to the White House in January. Warsh, who served as a Fed governor from 2006 to 2011, said his idea would not represent a return to the pre-1951 way of operating. "That would not be working in conjunction with the administration," he said. "It would be working with Treasury on goals that the Fed thinks are important to try and pursue and how would you present that to markets, as such, will be in conjunction." https://www.reuters.com/business/ex-fed-governor-warsh-says-new-accord-between-treasury-central-bank-needed-2025-07-17/
