Warning!
Blogs   >   FX Daily Updates
FX Daily Updates
All Posts

2025-07-02 06:02

MUMBAI, July 2(Reuters) - The Indian rupee weakened slightly on Wednesday, tracking modest declines in its regional peers while investors kept their focus on a looming U.S. tariff deadline as well as cues on the future path of the Federal Reserve's benchmark policy rates. The rupee dipped about 0.2% to 85.6850 per U.S. dollar as of 11:15 a.m. IST. Sign up here. Asian currencies were mostly lower as well, while the dollar index rose 0.1% to 96.7, supported by stronger-than-expected U.S. economic data that lent credence to the Fed's stance of being patient on cutting interest rates. Fed Chair Jerome Powell on Tuesday reiterated that the U.S. central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. Traders expect the rupee to be range-bound in the near term, with the U.S. non-farm payrolls report due on Thursday and developments on U.S.-India trade negotiations expected to provide directional cues. At this juncture, the rupee is expected to log two-way price action with resistance pegged in the 85.45-85.50 zone, a trader at a mid-sized private bank said. Persistent dollar bids from state-run banks around that level have also prompted speculation among traders that the Reserve Bank of India may be stepping in to absorb dollar inflows. The United States could reach a trade deal with India, President Donald Trump said on Tuesday, paving the way for the South Asian country to avoid a 26% levy that was announced on April 2 and paused till July 9. "We continue to forecast USD/INR to move lower with supportive domestic factors and a possible trade deal with the U.S., with the implicit assumption of a status quo in geopolitical conflicts," MUFG said in a note. The firm expects USD/INR to decline to 84 by the first quarter of calendar year 2026. https://www.reuters.com/world/india/rupee-dips-alongside-asian-peers-tariff-deadline-fed-cut-path-focus-2025-07-02/

0
0
0

2025-07-02 05:45

ADP report shows unexpected drop in private payrolls UK gilt yields surge amid finance minister concerns Dollar set to snap nine-session streak of declines NEW YORK, July 2 (Reuters) - Global stocks rose to a record high on Wednesday after U.S. data showed an unexpectedly weak reading on the labor market while British government bond yields surged on growing speculation about the future of the country's finance minister. The ADP National Employment Report showed private payrolls dropped by 33,000 jobs last month after a downwardly revised 29,000 increase in May and well below the 95,000 increase expected by economists polled by Reuters. Sign up here. The data comes ahead of Thursday's government payrolls report, although there is little, if any, correlation between the two. Also on tap for Thursday are weekly initial jobless claims. Market expectations for a July rate cut by the U.S. Federal Reserve climbed to just over 27% after the data, up from 20.7% in the prior session, according to CME's FedWatch Tool , opens new tab. "Employment softening and inducing the Fed to lower rates would be a positive, but if it softens too much, that would be a negative for growth and profits," said Jim Awad, senior managing director at Clearstead Advisors LLC in New York. On Wall Street, the S&P 500 and Nasdaq closed at record highs, buoyed in part by a bounce in Tesla (TSLA.O) , opens new tab after the stock dropped 5.3% on Tuesday. Tesla shares closed up 4.97% after the electric automaker posted its quarterly deliveries. The Dow Jones Industrial Average (.DJI) , opens new tab fell 10.52 points, or 0.02%, to 44,484.42, the S&P 500 (.SPX) , opens new tab rose 29.41 points, or 0.47%, to 6,227.42 and the Nasdaq Composite (.IXIC) , opens new tab rose 190.24 points, or 0.94%, to 20,393.13. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab climbed 3.84 points, or 0.42%, to 921.24 after hitting an intraday record of 922.27, while the pan-European STOXX 600 (.STOXX) , opens new tab index closed up 0.18%, lifted by renewable energy and luxury stocks. Longer-dated U.S. Treasury yields rose, with the benchmark U.S. 10-year note up 3.4 basis points at 4.283%. British government bond yields surged, at one point jumping nearly 23 basis points, the most since October 2022, after finance minister Rachel Reeves appeared visibly distressed in parliament, a day after the government sharply scaled back plans to cut benefits. The yield on the 10-year government bond , or gilt, was last up 16.8 basis points at 4.621%. Sterling tumbled 0.83% to $1.3631 after dropping as much as 1.35% and was on pace for its biggest daily percentage drop since June 17. The dollar index , which measures the greenback against a basket of currencies, rose 0.13% to 96.76 and was on track to snap a streak of nine straight declines, with the euro off 0.03% at $1.1801. President Donald Trump said on Wednesday the U.S. would place a 20% tariff on Vietnam, lower than initially announced as investors await progress on deals with other countries. He had previously said he was not considering extending the deadline for countries to negotiate trade deals, even as negotiations with top trade partner Japan failed to make headway, although he expected a deal with India. "The Vietnam-U.S. trade deal that was announced obviously alleviates one piece of the uncertainty puzzle around trade, not only because of the direct impact, but also perhaps as an indicator that there's more to come here over the coming week or so, all of which would help to alleviate what's been a major source of uncertainty for the last three months," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Southfield, Michigan. Investors were also eyeing Trump's massive tax and spending bill - which is expected to add $3.3 trillion to the national debt, slash taxes and reduce social safety net programs as it works its way through Congress. Republicans in the House of Representatives teed up a procedural vote on the bill that could reveal whether the party has enough support to pass it out of Congress. U.S. crude jumped 3.06% to settle at $67.45 a barrel and Brent settled at $69.11 per barrel, up 2.98% on the day as Iran suspended cooperation with the U.N. nuclear watchdog. https://www.reuters.com/world/china/global-markets-wrapup-1pix-2025-07-02/

0
0
0

2025-07-02 05:26

British pound sterling falls amid gilt selloff Dollar gains against yen, euro and Swiss franc ADP employment number falls in June Euro drops against dollar, but gains versus pound Canadian dollar strengthens against greenback NEW YORK, July 2 (Reuters) - The U.S. dollar rose against major currencies on Wednesday as data supported market expectations of a Federal Reserve interest rate cut, while the pound sterling fell amid a selloff in British government bonds. Traders were also positioning ahead of the Labor Department's employment report for June, due to be released on Thursday, and the July 4 holiday. Sign up here. The dollar had lost ground briefly but regained momentum after the ADP National Employment Report showed U.S. private payrolls fell for the first time in more than two years in June, suggesting the Fed might cut rates as soon as September. President Donald Trump's massive tax-cut and spending bill passed the U.S. Senate on Tuesday by the narrowest of margins, which is expected to add $3.3 trillion to the national debt. Debate over the legislation has now returned to the House of Representatives. Trump announced Vietnam had struck a trade deal with the U.S., which lowers planned tariffs and could push other countries to reach similar agreements on duties ahead of the July 9 deadline for higher tariffs to kick in. "I think the market logic is if nobody agrees to a deal, then the pressure is on the U.S. and that's dollar negative because it serves to adjust everything, including the fiscal bill since the tariffs are in the background even if they are not formally in the bill," said Steve Englander, head of global G10 FX Research at Standard Chartered. "But if you get countries settling, it's the countries that are left out that are in trouble. It's becomes risk positive generally because you're comfortable that there will be (trade) deals." The dollar was up 0.15% to 143.635 against the Japanese yen , on track to snap two straight sessions of losses. It was up 0.06% to 0.79150 against the Swiss franc , on track for gains after seven consecutive sessions of declines. "The dollar is bouncing against G10 currencies and it's not coincidental as it is coming with almost a 20 basis point rise in U.S. interest rates," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. British bonds suffered their worst selloff since October 2022, the day after the government sharply scaled back plans to cut benefits and there was speculation about the future of the country's finance minister. Sterling weakened 0.79% to $1.3634 against the dollar, dropping to a one-week low and poised to snap two straight sessions of gains. "It's not just the British pound that is sharply lower but the gilts are under a lot of pressure as well. I think it's just a crisis of confidence in the Labour government," Chandler added. The euro fell 0.08% to $1.179725 against the dollar but gained 0.9% versus the pound sterling . Eurozone inflation edged up last month to the European Central Bank's 2% target, confirming the era of runaway prices is over and likely shifting policymaker focus to tariff-related volatility. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.154% to 96.786, on track to snap nine straight sessions of losses. The index was still trading at multi-year lows after having its worst half-year since the 1970s, weighed by trade uncertainty. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.2 basis points to 3.789%, reversing earlier losses. The Canadian dollar strengthened 0.35% versus the greenback to C$1.36 per dollar. The dollar strengthened 0.03% to 7.161 versus the offshore Chinese yuan. https://www.reuters.com/world/middle-east/dollar-wallows-near-3-12-year-low-fed-cuts-trump-bill-focus-2025-07-02/

0
0
0

2025-07-02 04:31

A look at the day ahead in European and global markets from Ankur Banerjee Markets shrugged off the U.S. Senate passing President Donald Trump's "big, beautiful bill", with investor attention fixed to the path for U.S. interest rates and trade deals ahead of the United States' re-imposition of tariffs on July 9. Sign up here. Trump's tirade against the Federal Reserve and its Chair Jerome Powell to lower rates has stoked investor worries of the central bank's independence and credibility. It has also led to traders pricing in the possibility of early rate cuts. But Powell, at a central bank gathering in Portugal, reiterated that the Fed plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. That, along with relatively upbeat labour data on Tuesday, has left investors none the wiser about when the Fed would cut rates and watching out for Thursday's nonfarm payrolls data for cues. European stocks are set for a slightly higher open after a mixed Asian session, where Japan's Nikkei dropped 0.75% whereas Hong Kong's Hang Seng Index (.HSI) , opens new tab gained 0.75%. TARIFF DAY Trump's tax bill, which will add to the already enormous U.S. debt pile, slash taxes, reduce social safety net programs and boost military and immigration enforcement spending, now heads to the House of Representatives for possible final approval. Meanwhile, with the July 9 tariff day creeping closer, countries are scrambling to agree trade deals with the U.S. India is likely ink a deal whereas Japan is not, Trump said. All that has left markets in flux as we head into the second half of the year. The first half was dominated by relentless U.S. dollar selling as investors grappled with Trump's chaotic trade policies and looked for alternative places to park their money. The euro has had a blistering 2025 so far gaining 14% and perched at its highest level since September 2021, but whether it could replace the dollar as the world's reserve currency of choice is an open question. Central bankers gathered for an annual conference in the Portuguese resort of Sintra do not expect a major challenge to the dollar's status any time soon. "It's not going to happen just like that overnight. It never did historically," said European Central Bank President Christine Lagarde. "But there is clearly something that has been broken. Whether it is fixable, or whether it is going to continue to be broken - I think the jury's out." Key developments that could influence markets on Wednesday: Economic events: Euro zone unemployment rate for May, trade deal updates 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-2025-07-02/

0
0
0

2025-07-02 04:02

EU proposes 90% emissions cut by 2040 with flexibilities Previous EU climate targets have been based solely on domestic emissions reductions Europe is the world's fastest-warming continent BRUSSELS, July 2 (Reuters) - The European Commission on Wednesday proposed an EU climate target for 2040 that for the first time will allow countries to use carbon credits from developing nations to meet a limited share of their emissions goal. The European Union executive proposed a legally-binding target to cut net greenhouse gas emissions by 90% by 2040, from 1990 levels - aiming to keep the EU on course for its core climate aim to reach net zero emissions by 2050. Sign up here. But following pushback from governments including France, Germany, Italy, Poland and the Czech Republic, the Commission also proposed flexibilities that would soften the 90% emissions target for European industries. The EU has among the world's most ambitious climate targets. So far, its emissions targets have been based entirely on domestic emissions cuts. Reflecting Germany's public stance, up to 3 percentage points of the 2040 target can be covered by carbon credits bought from other countries through a U.N.-backed market, reducing the effort required by domestic industries. The carbon credits would be phased in from 2036, and the EU will propose legislation next year to establish quality criteria they must meet and rules on who would buy them. EU climate commissioner Wopke Hoekstra said the target had been drafted in an "extremely difficult" geopolitical context, but would create investment certainty for industries. "It makes sense from an economic, a security and also a geopolitical standpoint, to make sure that we stay the course on climate," Hoekstra said. "It is about protecting our people from extreme weather events," he added. FASTEST-WARMING CONTINENT Climate change has made Europe the world's fastest-warming continent and a severe heatwave this week caused wildfires and disruption across the continent, but Europe's ambitious policies to combat temperature rise have stoked tensions within the 27-member bloc. Enforcing strict climate action has been complicated by the tone set by the United States, where President Donald Trump withdrew the U.S. from global climate negotiations earlier this year. Some governments and lawmakers say industries reeling from U.S. tariffs and high energy costs cannot afford tougher emissions rules. German environment minister Carsten Schneider said the target was a strong signal to other major economies and that Europe had maintained a high level of ambition. "This can motivate China, India, Brazil, South Africa and others to follow suit," he said. The Commission proposal offered countries more flexibility on which sectors contribute to the 2040 goal - for example, if their forests struggle to absorb enough CO2, they could compensate by cutting emissions from cars faster. The EU's climate science advisers had opposed counting credits towards the 2040 target, and said buying foreign carbon credits would divert investments from local industries. Carbon credits are generated by projects that reduce CO2 emissions abroad - for example, forest restoration in Brazil, and raise funds for such projects. However, some credits have failed to deliver the environmental benefits they claimed. "Carbon credits have a long record of failure and ultimately do not stop Europe emitting more than its fair share of carbon emissions," Colin Roche, climate justice coordinator at campaign group Friends of the Earth, said following Wednesday's announcement. EU countries and lawmakers must negotiate and approve the 2040 goal. The EU faces a mid-September deadline to submit a new 2035 climate target to the U.N. - which the Commission has said should be derived from the 2040 goal. https://www.reuters.com/sustainability/cop/eu-add-international-co2-credits-next-climate-goal-2025-07-02/

0
0
0

2025-07-02 03:05

MUMBAI, July 2 (Reuters) - The Indian rupee is expected to open lower on Wednesday, tracking declines in most other Asian currencies and equities amid renewed worries over U.S. President Donald Trump's tariffs. The 1-month non-deliverable forward indicated a open in the 85.62-85.64 range, versus 85.52 on Tuesday. The rupee has been largely range bound in recent sessions, holding between the key support zone at 85.90–86.00 and resistance near 85.30. Sign up here. "Both of these levels are difficult to break," a currency trader at a bank said. "You'll likely have to wait until July 9 for a decisive move, and that's when we could see a breakout either way." He added for now the risks are skewed toward a decline past 86 rather than a rally above 85.30. ASIA STRUGGLES Trump ruled out extending the July 9 deadline for trade deals on Tuesday and said he remained doubtful about reaching a deal with Japan. Japanese shares dropped 1% and the yen weakened versus the dollar. The renewed trade worries put pressure on risk-sensitive currencies, while dampening appetite for riskier assets. Asian equities and currencies declined amid wariness over potential U.S. action after the deadline. The Korean won, the Malaysian ringgit and the Thai baht were all down by 0.3% and the offshore Chinese weakened past 7.1650 to the U.S. dollar. Meanwhile, in a development seen as mildly negative for the dollar, U.S. Federal Reserve Chair Jerome Powell said he did not rule out the possibility of cutting interest rates at the Fed's July 29–30 meeting, while reiterating that the central bank will wait for more economic data before deciding on rate cuts. Traders have slightly increased the odds of a cut at that gathering. Investors assess Trump's massive tax-and-spending bill, which was passed by the U.S. Senate and will return to the House for final approval. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.75; onshore one-month forward premium at 10.50 paise ** Dollar index at 96.66 ** Brent crude futures up 0.1% at $67.2 per barrel ** Ten-year U.S. note yield at 4.25% ** As per NSDL data, foreign investors bought a net $97 million worth of Indian shares on June 30 ** NSDL data shows foreign investors bought a net $181.2 million worth of Indian bonds on June 30 https://www.reuters.com/world/india/rupee-expected-track-asia-forex-lower-renewed-trump-tariff-worries-2025-07-02/

0
0
0