2025-02-20 07:21

MUMBAI, Feb 20 (Reuters) - Reciprocal U.S. trade tariffs proposed by President Donald Trump are unlikely to have a significant negative bearing on the rupee, the head of global foreign exchange at Jefferies said. Last week, Trump unveiled plans to levy reciprocal tariffs on all countries that have tariffs on U.S. goods or set up non-tariff barriers to limit U.S. access to their markets. Analysts reckon the levies may hamper exports such as petrochemicals and pharmaceuticals, which make up about one-fifth of India's exports to the U.S. The tariffs may also hit Asia's third-largest economy where growth has already turned sluggish. India was the 10th largest exporter to the world's largest economy in 2024. Still, the threat "is not enough to move the currency or for the market to reprice any sort of significant currency adjustment," Jefferies' Brad Bechtel said in an interview on Tuesday. "We had far bigger tariffs implemented on China, and there was very little impact." India charged a weighted average tariff of about 11% in 2023, around 8.2 percentage points higher than U.S. tariffs on Indian exports, according to estimates from Citi. The countries have agreed to start talks to clinch an early trade deal and New Delhi has promised to buy more U.S. oil, gas and military equipment and fight illegal immigration after Indian Prime Minister Modi met with Trump in February. While India's high-tariff rate puts it at the risk of facing reciprocal tariffs, Bechtel said the outcome is not yet clear as implementation will likely be a multi-step process over several quarters, involving negotiations and counter-tariffs. "Will it impact the amount that India can export to the U.S.? It all depends on what can be substituted away versus not but I just don't see it being a material impact to the rupee," he said. The rupee is among Asia's worst-performing currencies in 2025 and slipped to a record low of 87.95 in February. Jefferies expects the currency to weaken steadily towards 88 by mid-2025 and 89 by the end of the year. Sign up here. https://www.reuters.com/markets/currencies/indian-rupee-unlikely-see-significant-impact-reciprocal-us-tariffs-jefferies-2025-02-20/

2025-02-20 07:01

Australia to set up A$1 billion fund to develop green iron Green iron key for Australia's iron ore in energy transition Fund contributes to bailout for GFG's Whyalla steelworks MELBOURNE, Feb 20 (Reuters) - Australia on Thursday allocated A$1 billion ($636 million) to a fund that will support the manufacture of green iron and its supply chains, including an initial A$500 million to bail out the Whyalla steelworks in South Australia. On Wednesday, South Australia's premier put Whyalla, one of the country's two steel plants, into administration for unpaid bills, and said he wants to help develop lower carbon steel production in the state. The A$500 million is part of a broader A$1.9 billion state and federal government package to shore up the steel plant owned by commodities financier Sanjeev Gupta's GFG Alliance. GFG said in a statement on Wednesday it is seeking advice on its options. Australia is the world’s largest producer of iron ore which earned more than A$100 billion in export income in 2023-24. The wider iron and steel sectors support over 100,000 direct and indirect jobs, according to government figures. The country will hold elections by May. A key policy for the Labor government under the Future Made in Australia banner is to harness the clean energy transition to drive manufacturing growth and add value to critical minerals. "Investment in green iron and steel will secure future demand for Australia’s iron ore as the world moves toward lower-emissions iron and steel," the Department of the Prime Minister said in a statement. The transition represents a threat to Australia's market share of the steel supply chain because of the relatively low purity of its ore requires more processing to cut out carbon. Australia's iron ore majors are already assessing ways they can reduce carbon from the steel supply chain to meet their emissions targets, but are racing against burgeoning industries in other jurisdictions. Fortescue plans to produce 1,500 tonnes of green iron using hydrogen at its Christmas Creek operations by year end. BHP (BHP.AX) , opens new tab , Rio Tinto and BlueScope Steel will jointly develop a pilot plant to produce low-carbon iron from Pilbara ores, the companies said in December. Australian think tank The Superpower Institute puts the country's opportunity for green iron ore and steel at up to A$400 billion. South Australia is seen as a part of Australia's roadmap to green iron and potentially green steel because it has access to a deep water port, plentiful reserves of high-grade magnetite ore, a steel plant and a high proportion of renewable energy generation in its power grid. Companies are involved in early-stage green iron technology include Calix (CXL.AX) , opens new tab, Australia's Element Zero, and Israel-based Helios Project. ($1 = 1.5721 Australian dollars) Sign up here. https://www.reuters.com/markets/commodities/australia-launches-636-mln-green-iron-fund-offers-lifeline-steel-works-2025-02-20/

2025-02-20 06:59

MUMBAI, Feb 20 (Reuters) - The Indian rupee strengthened on Thursday aided by a rise in the Chinese yuan after U.S. President Donald Trump said a new trade deal with Beijing was possible, while dollar sales from foreign banks also aided the local unit. The rupee was up nearly 0.3% at 86.7125 as of 12:30 p.m. IST, largely in line with gains in most regional peers. The offshore yuan was up 0.2% at 7.26 which helped lift regional currencies, while the dollar index declined to 106.9. The yuan, a closely watched peer of the rupee, strengthened against the dollar as market sentiment improved after Trump said a new trade deal with Beijing was possible. Although the U.S. imposed a 10% tariff on Chinese imports starting February 1, Trump has stopped short of the more extreme measures he had floated on the campaign trail last year which included a 60% tariff rate. In addition to a rise in regional currencies, dollar sales from foreign banks, most likely on behalf of custodial clients, also aided the rupee, a trader at a state-run bank said. "Foreign banks are dominating the offers, which suggests that there could be some inflows into equities today," the trader added. The persistent foreign selling of Indian stocks has been a sore point for the rupee, with overseas investors having pulled out over $12 billion from local stocks over 2025 so far. Meanwhile, data released late on Wednesday showed that the rupee's 40-currency real effective exchange rate eased to 104.8 in January, down from 107.1 in December, signalling an easing of the currency's overvaluation. The rupee's recent slide from 84 to nearly 88 in about four months has helped ease the overvaluation, which Goldman Sachs reckons made the Reserve Bank of India more comfortable with a surprise and outsized intervention to shore up the currency earlier this month. Sign up here. https://www.reuters.com/markets/currencies/rupee-boosted-by-stronger-yuan-foreign-banks-dollar-sales-2025-02-20/

2025-02-20 06:40

Safe-haven gold has risen about 12% so far this year Hits all-time high of $2,954.69/oz, tenth record this year Analyst says fundamental factors remain very supportive Feb 20 (Reuters) - Gold prices surged to a record high on Thursday, as fears of a global trade war sparked by U.S. President Donald Trump's tariff threats fueled safe-haven demand for the precious metal. Spot gold rose 0.1% to $2,936.38 an ounce as of 02:36 p.m. ET (1936 GMT). It hit $2,954.69 earlier in the session — its tenth record high so far this year. U.S. gold futures settled 0.7% higher at $2,956.10. Bullion has gained about 12% so far this year. "Ongoing trade tensions continue to stoke inflation and growth concerns and therefore safe-haven interest in gold," said Peter Grant, vice president and senior metals strategist at Zaner Metals. Trump said on Wednesday he would announce tariffs related to lumber, cars, semiconductors and pharmaceuticals "over the next month or sooner." Since taking office on January 20, Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminium. "We continue to see central bank buying ... throughout the year. That's one of the main underlying factors of support. We are also seeing ETF flows with three straight days of flows into the gold market," said Phillip Streible, chief market strategist at Blue Line Futures. Trump also denounced Ukrainian President Volodymyr Zelenskiy as a dictator on Wednesday and told him he had to move quickly to secure peace or risk losing his country. A potential peace deal may briefly lower geopolitical tensions and could weigh on gold for the short term, said Grant. "The all-time high could hold for a number of weeks but I think the uptrend ultimately continues as there are sufficient fundamental factors that remain very supportive." Minutes of the U.S. Federal Reserve's last policy meeting on Wednesday showed Trump's initial policy proposals had stoked concerns over rising inflation, reinforcing the central bank's stance to hold off on further rate cuts. Gold exports from Switzerland rose year-on-year in January as supplies to the U.S. soared to the highest in at least 13 years, Swiss customs data showed. Spot silver added 0.6% at $32.92 an ounce. Platinum rose 0.7% to $978.05, while palladium advanced 1% to $978.02. Sign up here. https://www.reuters.com/markets/commodities/trump-tariff-worries-keep-gold-near-record-high-2025-02-20/

2025-02-20 06:34

Headline earnings up 42% to $1.2bn Total dividend up 34% Gold price forecast to remain elevated JOHANNESBURG, Feb 20 (Reuters) - Gold Fields (GFIJ.J) , opens new tab may consider a share buyback programme as a way to boost shareholder returns if the current gold price rally is sustained, CEO Mike Fraser said on Thursday. The South African gold miner on Thursday reported a 42% jump in profit for last year, supported by rising gold prices, even though its output of the precious metal fell 10%. Gold Fields raised its dividend by 34% to 10 rand ($0.54) per share - a company record - after its profit rose to about $1.2 billion last year from $837 million the previous year. "With that strong cash generation, there would be opportunities for further returns and we’re considering what is the best way to do that," Fraser told Reuters in an interview. "Buybacks certainly would be part of the consideration," he added. Larger producers, companies with high quality portfolios and miners not pursuing significant development programmes will have more room to deliver high returns to shareholders, Fraser said. Gold prices rose by more than 27% in 2024, their biggest yearly jump since 2010, driven by safe-haven demand, interest rate cuts and buying from central banks. The rally has continued into 2025 and some analysts see the gold price breaching the $3,000 per ounce , opens new tab mark this year. Gold Fields joins peers including AngloGold and Barrick in boosting returns to investors as bullion prices hit record highs. The company said its output dropped 10% to about 2 million ounces last year but expects output to rise to between 2.25 million ounces to 2.45 million ounces this year, as it ramps up production at a new Salares Norte mine in Chile. Gold Fields plans to start building a new mine at its Windfall project in Quebec, Canada this year, with production targeted to begin in 2028, it said. ($1 = 18.5066 rand) Sign up here. https://www.reuters.com/markets/commodities/gold-fields-profit-jumps-boosts-dividend-amid-price-rally-2025-02-20/

2025-02-20 06:27

Euro gains after three straight days of losses Yen surges to 11-week highs vs dollar Traders monitor geopolitics; euro most sensitive to Russia talks US jobless claims rise in latest week Philly Fed index drops in February NEW YORK, Feb 20 (Reuters) - The U.S. dollar dropped against major currencies on Thursday, as investors took a step back and assessed President Donald Trump's latest tariff plans, while the yen rose to 11-week peaks versus the greenback as bets increased for further rate hikes by the Bank of Japan (BOJ). U.S. data showing initial jobless claims, which were in line with expectations, and a report indicating factory output growth slowed in the mid-Atlantic region in February had minimal impact on the currency market. The reports have not changed expectations that the Federal Reserve will remain on hold for several months. Tariffs, however, remained a major focus for currency investors even though their impact has weakened for now. Trump said on Wednesday he will announce fresh tariffs over the next month or sooner, adding lumber and forest products to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals. "The market has reached tariff-fatigue where it's just not reacting...as it did right after the election in November, December and even in January," said Paresh Upadhyaya, director of fixed income and currency strategy, at Amundi U.S. in Boston. "It's now operating using the government shutdown playbook, where everyone thinks they have seen this dog-and-pony show before and expects the same thing. There is the threat of tariffs, leading to negotiations and a reprieve and some form of resolution." In afternoon trading, the euro rose 0.7% against the dollar to $1.0499 , rising after three straight days of losses, while the greenback slid 0.7% versus the Swiss franc to 0.8979 franc . The dollar earlier slipped after data showed initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 219,000 for the week ended February 15. Economists polled by Reuters had forecast 215,000 claims for that week. Also marginally weighing on the dollar was a separate report indicating the Philadelphia Fed's monthly manufacturing index tumbled by 26.2 points - the most in nearly five years - to 18.1 in February from 44.3 in January. "The U.S. economic momentum is slowing...and not providing a supportive backdrop to the dollar," said Boris Kovacevic, global macro strategist at payments firm Convera in Vienna. "The Fed's hawkish monetary policy...can only do so much to help the greenback and the pause is already fully priced in." The yen, meanwhile, rose to an 11-week peak of 149.40 per dollar. The U.S. currency last traded down 1.1% at 149.77 yen, driven mostly by safe-haven buying amid worries about Trump's tariffs and rising expectations of more BOJ hikes this year. The euro also dropped against the yen to a more than one-week low, last down 0.5% at 157.21 yen . BOJ Governor Kazuo Ueda said on Thursday he met Prime Minister Shigeru Ishiba for a regular exchange of views on the economy and financial markets, suggesting that the government has no objections to hiking rates and normalizing policy. "We have been early and patient with the bullish call on the yen and are sticking with it - the currency should be far closer to 120 or 130 yen," wrote David Rosenberg, founder and president of research firm Rosenberg Research. Markets are also monitoring geopolitical developments after Trump and Ukrainian President Volodymyr Zelenskiy traded barbs on Wednesday, with the U.S. president calling the latter "a dictator". Zelenskiy on Thursday, however, took a more constructive tone, saying Ukraine is ready to work quickly and tirelessly to produce a strong and useful agreement on investments and security with the United States. He said on social media site X that he had a "good discussion" with Keith Kellogg, the U.S. envoy for Ukraine and Russia. The euro, the most sensitive currency to Russia-Ukraine news, hit session highs against the dollar after the Zelenskiy headlines. Investors also weighed Trump's comments saying "it's possible" for the United States and China to have a new trade deal. He expects Chinese President Xi Jinping to visit the U.S., without saying when. The Australian and New Zealand dollars, whose countries have huge exposure to Chinese trade, gained on the China headlines. The Aussie dollar last traded up 0.9% at US$0.6401, also reacting to a mixed jobs report showing employment outpaced forecasts for a second successive month in January, yet the unemployment rate still ticked higher. The New Zealand dollar also posted sharp gains, rising 1% to US$0.5764. Sterling was also up, gaining 0.6% against the dollar to $1.2664. Sign up here. https://www.reuters.com/markets/currencies/yen-rises-dollar-steady-traders-assess-tariff-risk-policy-outlook-2025-02-20/