2025-06-18 10:27

MUMBAI, June 18 (Reuters) - The Indian rupee declined on Wednesday on the back of persistent corporate hedging activity and elevated oil prices as market participants continued to fret over escalating hostilities in the Middle East. The rupee ended at 86.4775 against the U.S. dollar, down nearly 0.3% from its close of 86.24 in the previous session. Sign up here. The currency slipped past 86.50, a closely watched psychological support level, to hit its weakest level in over two months before slightly paring losses. Traders pointed to dollar bids from local corporates, including oil companies, and speculative interest on wagering against the local currency among factors that hurt the rupee. Oil prices remained elevated - albeit cooling off the highs hit on Tuesday - as markets weighed the chance of supply disruptions from the Iran-Israel conflict. Brent crude oil futures were last quoted at $75.5 per barrel. The tepid risk sentiment also weighed on Asian equity markets with India's benchmark equity indexes, the BSE Sensex and Nifty 50 (.NSEI) , opens new tab, logging a fall of about 0.2% each. Meanwhile, the dollar-rupee forward premiums nudged higher. The 1-month forward premium rose to 10 paisa, with traders citing paying interest spurred by arbitrage between non-deliverable and onshore forwards. The 1-year dollar-rupee implied yield also ticked up to 1.83%. Price action on the dollar-rupee pair is "cementing the upward bias," a trader at a foreign bank said, adding that further escalations in the Iran-Israel conflict could push it closer to 87. Later in the day, the focus will be on the U.S. Federal Reserve's policy decision. The central bank is widely expected to keep rates unchanged with updates to its future economic projections and remarks from Chair Jerome Powell keenly awaited by market participants. "The Fed will likely consider any oil price shock as much a threat to growth as to inflation," DBS Bank said in a note. https://www.reuters.com/world/india/rupee-falls-corporate-dollar-bids-elevated-oil-prices-weigh-2025-06-18/

2025-06-18 10:00

LONDON, June 18 (Reuters) - It's tempting to think the dollar's precipitous decline this year will soon taper off, but the move appears neither especially speculative nor cyclical and a durable turnaround could be years away. The dollar index's (.DXY) , opens new tab near 10% decline so far this year against the most-traded currencies marks its steepest first-half loss since 1986, back when the greenback was still reeling from the then G5's "Plaza Accord" agreement to puncture the currency's overvaluation in late 1985. Sign up here. And as overshoots are typical in currency markets, there are some reasonable questions about whether the dollar may have come down too far too soon, leaving it ripe for a correction. Indeed, this month's global fund manager survey from Bank of America suggests at first glance that the dollar move may be overstretched. The survey showed the net underweight position in the dollar is the largest in 20 years. What's more, "short dollar" had found its way into the top three "most crowded trades" on the planet according to investors. That was just behind "long gold" and "long Magnificent 7" megacap stocks. Often seen as a contrarian indicator, crowded trades typically signal an extreme and potentially over-priced move. But history shows that certain trades can stay crowded for quite some time. The scramble for Magnificent 7 stocks, for example, was considered the single most-crowded trade in the same monthly survey for two years through this February. And yet exchange-traded funds tracking these seven mega cap tech stocks more than doubled in price over the same period, before eventually retreating late last year. To be sure, highly speculative or leveraged trades can get overcooked and unwind a lot more quickly. But dollar positioning among currency speculators is nowhere near historic extremes. According to weekly CFTC data, speculative net short dollar positions did accumulate to their most in about two years in April but have been pared back since. And the dollar has resumed its decline this month regardless. 'NAME OF THE GAME' The 20-year high in dollar underweighting by asset managers in the BofA survey, by contrast, is of a different order altogether. That indicates both wariness of U.S. assets at large - due to concerns about the current U.S. administration's approach to global trade, geopolitics and institutional integrity - and a more structural dollar retreat. It's notable that even with this year's 10% dollar decline and the existing underweight among global funds, almost two-thirds of survey respondents still saw the dollar as overvalued. What's more, relatively short interest rates are often the driving force in cyclical currency moves - with the dollar sinking even as widening transatlantic rate gaps suggest otherwise. "The name of the game will be diversifying away from the U.S. and into European and emerging market bonds," said Amundi chief investment officer Vincent Mortier on the release of the giant European asset managers' half-year outlook. For others, such as Carlyle's Jeff Currie, the historic developments weighing on the dollar are related to long-term geopolitical shifts, defense and energy considerations. The basis of his framework is that the U.S. retreat from international engagement - or its arm's-length engagement, as seen over the past week in the Middle East - is making the world more dangerous and more expensive. Tariffs and capital costs are rising, while liquidity is draining. The net result is a weaker dollar, higher commodity prices and a demand for "asset-heavy" sectors like defense, which he argues should lead to higher growth and innovation in those countries with the capacity to fund these efforts. "This is just the beginning of a much larger capital rotation out of the asset light sectors and into asset heavy sectors that are the backbone of global supply chains and slanted towards Europe," Currie wrote. To reinforce the point, he highlights two prior rotations that each lasted about two years. These include the shift from 'BRICS' emerging market economies to U.S. tech in 2014-2015 and, before that, the move from dot.com stocks to BRICS in 2002-04 - the last time asset managers polled by BofA were this underweight dollars. "We believe we are (now) in one of these rotations towards Europe given the valuations discounts in Europe and the region's stronger fundamental backdrop and fiscal capacity for defense," Currie wrote. Of course, the dollar exchange rate, much like any other financial price, rarely moves in a straight line in one direction for very long. But even if we get periodic bounces, the downtrend could persist for a lot longer - even as crowded as it may be already. The opinions expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/currencies/dollar-exit-could-be-crowded-some-time-2025-06-18/

2025-06-18 09:02

ZURICH, June 18 (Reuters) - Wealth grew disproportionately quickly last year in the United States, where over 379,000 people became new U.S. dollar millionaires, more than a 1,000 a day, a report published on Wednesday showed. Private individuals' net worth rose 4.6% worldwide, and by over 11% in the Americas, driven by a stable U.S. dollar and upbeat financial markets, the 2025 Global Wealth Report by UBS (UBSG.S) , opens new tab found. The United States accounted for almost 40% of global millionaires in 2024. Sign up here. In 2023, Europe, the Middle East and Africa had led a rebound in global wealth after a decline in 2022. Greater China - which the report defined as mainland China, Hong Kong and Taiwan - led last year for individuals with a net worth of $100,000 to $1 million, accounting for 28.2%, followed by Western Europe with 25.4% and North America with 20.9%. The majority of people worldwide were below that threshold, however, with over 80% of adults in the UBS sample having a net worth of under $100,000. Overall, about 1.6% registered a net worth of $1 million or more, the report said. Over the next five years, the Swiss bank projects average wealth per adult to grow further, led by the United States, and, to a lesser extent, Greater China. https://www.reuters.com/business/finance/us-added-over-1000-new-millionaires-day-last-year-ubs-report-says-2025-06-18/

2025-06-18 07:56

June 18 (Reuters) - Investigators believe the Air India Boeing (BA.N) , opens new tab Dreamliner had its emergency-power generator operating when it crashed last week in India's Ahmedabad, the Wall Street Journal reported on Wednesday citing people familiar with the probe. Boeing said it will defer to India's Aircraft Accident Investigation Bureau for comment. Engine maker GE Aerospace did not respond to a Reuters request for comment. Sign up here. India's federal civil aviation ministry did not immediately respond to Reuters' email seeking comment. Reuters couldn't immediately verify the WSJ report. The system, known as the Ram Air Turbine (RAT), generates electricity and hydraulic pressure to ensure pilots can control the plane even if both engines fail. The preliminary finding raise questions about whether the plane's engines functioned properly during takeoff, the report said. The Dreamliner was fitted with GE Aerospace's (GE.N) , opens new tab GEnx engines. The Boeing 787-8 Dreamliner carrying 242 people bound for Britain's Gatwick Airport began losing altitude seconds after takeoff. All but one passenger died in the world's worst aviation disaster in a decade, with around 30 ground fatalities. India's aviation safety watchdog said on Tuesday that surveillance of Air India's Boeing 787 fleet revealed no major safety concerns. https://www.reuters.com/business/aerospace-defense/boeing-787s-emergency-power-system-likely-active-before-air-india-crash-wsj-2025-06-18/

2025-06-18 07:47

Key benchmark rate kept at 5.50%, as expected Governor said monitoring for room to cut rates further May lending rate slowest in almost 2 years JAKARTA, June 18 (Reuters) - Indonesia's central bank paused its easing cycle on Wednesday, as expected, while urging commercial banks to reduce lending rates and boost credit growth to support the economy. Economists said the central bank was likely to continue its gradual pace of monetary easing, given headwinds from tariffs and geopolitical uncertainties on Southeast Asia's largest economy. Some predict a further 50 basis points of cuts in the second half of the year. Sign up here. On Wednesday, Bank Indonesia kept the benchmark 7-day reverse repurchase rate (IDCBRR=ECI) , opens new tab at 5.50%, as expected by 21 of 31 economists polled by Reuters. Its two other main rates were also left unchanged. BI has cut interest rates three times since September and downgraded its economic growth outlook twice this year, listing challenges such as slowing domestic demand and shaky global growth due to the impact of U.S. tariffs and wars. BI maintained its 2025 growth forecast at 4.6% to 5.4%, anticipating improving economic activity in the second half. Governor Perry Warjiyo, speaking at a press conference, said BI remains open to further lowering borrowing costs, as inflation is expected to remain within target this year and next year, while household spending and investment need stimulus. "The (rate cut) timing of course will depend on global conditions, especially with regard to rupiah stability," he said. Warjiyo called on banks to align with BI's easing measures and lower their credit interest rates, highlighting that loan growth slowed to 8.43% in May. That rate was the slowest since June 2023, according to LSEG data. BI has relaxed banks' reserve requirements, a policy that has provided additional liquidity of 372 trillion rupiah ($22.83 billion) to lenders, Warjiyo said. Annual inflation was 1.6% in May, near the bottom of BI's target range of 1.5% to 3.5%, which some analysts say points to sluggish household spending. "Despite a benign inflation outlook, policymakers likely view the recent Middle East tensions and its impact on the regional currencies, with trepidation," said DBS economist Radhika Rao, who expects cuts of 50 basis points in total this year to a terminal rate of 5%. To stimulate demand, the government has launched a $1.5 billion incentive package, including transportation subsidies and cash and food handouts for June and July. ($1 = 16,295 rupiah) https://www.reuters.com/world/asia-pacific/indonesia-central-bank-keeps-rates-steady-expected-2025-06-18/

2025-06-18 07:40

June 18 (Reuters) - Australia's Woodside Energy (WDS.AX) , opens new tab has entered an agreement with a unit of Malaysian state-owned oil and gas firm Petronas (IPO-PETO.KL) , opens new tab to supply liquefied natural gas (LNG) to Malaysia starting 2028, the two companies said on Wednesday. Under the deal, Woodside Energy, Australia's largest independent oil and gas producer, will supply 1 million tonnes per annum of LNG to Malaysia for a period of 15 years. Sign up here. The LNG will be sourced from Woodside's global portfolio, including the recently approved Louisiana LNG project in the United States. The agreement is expected to support Petronas’ efforts to ensure secure and flexible LNG supply to meet growing demand in Peninsular Malaysia and the broader Asia-Pacific region, the companies said. On Tuesday, Petronas Chief Executive Tengku Muhammad Taufik said the company is planning to start importing LNG in four to five years. The companies said they are working to finalise the heads of agreement into a formal sales and purchase agreement. https://www.reuters.com/business/energy/woodside-energy-signs-lng-supply-deal-with-petronas-unit-2025-06-18/