2025-02-06 05:22
Gold hit a record high of $2,882.16 on Wednesday Technically, gold is overbought - analyst US non-farm payrolls report due on Friday Feb 6 (Reuters) - Gold prices steadied on Thursday after a five-session rally to all-time highs on tensions over trade wars between the world's two largest economies raising worries about economic growth and uncertainty around the future path of U.S. interest rates. Spot gold edged 0.1 higher to $2,867.93 per ounce by 1214 GMT after hitting an all-time high of $2,882.16 on Wednesday. U.S. gold futures were flat at 2,892.20. "It's quite clear that gold has got a bit between its teeth, like a racing horse, and the momentum is very much on the upside," independent analyst Ross Norman said, adding that the danger of an escalation in the trade war, especially between the U.S. and China, is raising massive uncertainties. "But the correction is a natural phenomenon... profit-taking off the highs," Norman said, noting that gold, technically, is overbought with the RSI of about 76, so it is looking a bit overextended. A Relative Strength Index (RSI) reading above 70 indicates overbought conditions, potentially leading to a correction. While global trade war concerns have accelerated the flight to safety, "growing bets around tariffs rekindling inflationary pressures could bring gold bears back into the picture, especially if this results in higher for longer U.S. rates," said FXTM senior research analyst Lukman Otunuga. U.S. Federal Reserve officials pointed to the large policy uncertainty around tariffs and issues arising from the early days of Trump's administration as among the top challenges in figuring out where to take the monetary policy in the months ahead. Market focus is on the non-farm payrolls report on Friday, which could offer insights into the economy's overall strength and Fed policy path. "A disappointing jobs print could strengthen the argument around lower U.S. interest rates, boosting gold prices. The same can be said vice-versa," Otunuga added. In other metals, spot silver dropped 0.8% to $32.06 per ounce, and palladium fell 0.4% to $985.50. Platinum rose 1.4% to $993.50. Sign up here. https://www.reuters.com/markets/commodities/gold-holds-near-record-peak-trade-jitters-boost-safe-haven-demand-2025-02-06/
2025-02-06 05:09
Trump repeats pledge to raise US production, lower oil prices US crude stocks expected to rise again this week - Macquarie US Treasury imposes sanctions targeting Iranian oil to China Saudi Aramco raised March crude prices for Asian buyers Feb 6 (Reuters) - Oil prices settled lower on Thursday after U.S. President Donald Trump repeated a pledge to raise U.S. oil production, unnerving traders a day after the country reported a much bigger-than-anticipated jump in crude stockpiles. Brent crude futures fell 32 cents, or 0.4%, to settle at $74.29 a barrel. U.S. West Texas Intermediate crude fell 42 cents, or 0.6%, to $70.61. On Thursday, Trump repeated a pledge to boost U.S. production, already the highest in the world, in a bid to lower oil prices and ease consumer inflation. Oil prices gave up early gains after Trump's comments. Still, analysts have questioned whether U.S. oil producers will be willing to pump more barrels in the current market. "There is no indication of accelerating U.S. drilling activity," UBS analyst Giovanni Staunovo said, noting he was surprised by the market reaction to Trump's comments. Oil prices were also under pressure from swelling U.S. crude inventories. Benchmarks fell 2% on Wednesday after U.S. government data showed domestic crude stockpiles rose by 8.7 million barrels last week, well above analysts' expectations of a 2 million-barrel increase. Macquarie analysts said they expect another large build in U.S. crude stocks this week. TRADE SET TO REMAIN VOLATILE Trading was volatile. Prices started the session higher after Saudi Arabia's state oil company sharply raised prices for buyers in Asia. Prices also drew support from new U.S. sanctions against individuals and entities for facilitating shipments of Iranian oil to China. "The notice is out - if you're a refiner or shipper moving Iranian oil, any part of it, you're at risk of getting whacked by the Treasury," Flynn said. In the near-term, oil markets are expected to remain choppy, with global trade pressured by Trump's rapidly changing decisions on tariffs and sanctions. On Monday, Trump suspended his threat of steep tariffs on Mexico and Canada, but new duties on Chinese imports came into effect from Tuesday. Trump reimposed a 'maximum pressure' campaign against Iran, yet also said he was open to a deal with Tehran. "The only certainty is that comments from President Trump will continue to drive volatility in the oil market," UBS's Staunovo said. Global benchmark Brent crude has tumbled over 8% since Trump took office on January 20, while WTI has dropped over 7%. Sign up here. https://www.reuters.com/markets/commodities/oil-pares-losses-after-saudi-price-increase-2025-02-06/
2025-02-06 05:01
TOKYO, Feb 6 (Reuters) - Canada's Alberta province, a major gas producer, needs to find new export markets in face of a U.S. tariff threat, and expanding in Japan is an important target, its minister of environment and protected areas, Rebecca Schulz, told Reuters. "Given what we've seen in the United States, this is reinforcement that we need to diversify our export markets, and Japan, our already existing relationship, is going to be a key area of focus," Schulz said during an interview in Tokyo late on Wednesday. She has been meeting officials, business lobbies and company representatives, including from JERA, Japan's top LNG buyer, JOGMEC, Japan Gas Association, chaired by a Tokyo Gas (9531.T) , opens new tab executive, and others, over the past week. "Energy security is a hugely important focus for many countries, including Japan and Canada as well," Schulz said. "A lot of our conversations were about the balance of meeting energy demand." While LNG demand in Japan overall is falling, its needs could increase if its renewable energy roll-out is too slow, a senior industry ministry official said. This week, Mitsubishi (8058.T) , opens new tab said it is reviewing offshore wind operations in Japan while others also warned of rising costs. U.S. President Donald Trump and Japan's Prime Minister Shigeru Ishiba are set to meet on Friday and are expected to discuss a huge proposed Alaska LNG project, among other topics, sources said, as competition for major LNG buyers is rising. U.S. Senator Dan Sullivan on Wednesday urged Japan and other U.S. allies in Asia to back the Alaska LNG project, warning that if they were not interested in buying the gas, strategic rival China would be. Canada is preparing to start exports to Japan later this year from the LNG Canada project where Mitsubishi is a shareholder, but the country is looking to add more export facilities. Asked about Alberta's competitive advantages versus the U.S., Schulz pointed to a shorter shipping time compared to the U.S. Gulf Coast, and "given just geographic realities, less geopolitical risk", among other factors. "There are a number of projects that are being worked on ... four or five for additional market capacity," she said. "We see a huge amount of opportunity in expanding on our partnerships with Japan, and so that's a main focus of our government." Sign up here. https://www.reuters.com/business/energy/canadas-alberta-eyes-japan-new-lng-deals-amid-us-tariff-threat-minister-says-2025-02-06/
2025-02-06 03:57
MUMBAI, Feb 6 (Reuters) - The Indian rupee will likely not receive much of a boost on Thursday from the further unwinding of long dollar positions fuelled by the relief on the tariffs front. The 1-month non-deliverable forward indicated that the rupee will open flat-to-marginally higher to the U.S. dollar from 87.4650 on Wednesday. The rupee declined to an all-time low of 87.4875 in the previous session despite a good day for Asian peers. The Asian FX space has found relief from a pause on U.S. tariffs on Canada and Mexico, and from what analysts say was a measured retaliation by China to U.S. tariffs. "Yesterday's move was quite surprising, considering that there was negative news (for the rupee)," a currency trader at a bank said. "Plus, you would think that it (dollar/rupee pair) has already rallied quite a lot, and more upside would require something significant." The rupee has not benefited from the ongoing unwinding of long dollar positions on optimism that a damaging trade war will be avoided. The dollar index is down more than 2% from the highs hit on Monday. The index hit a three-week high of 109.88 at the start of the week, as the U.S. looked poised to impose 25% import tariffs on Mexico and Canada, which President Donald Trump later suspended. The offshore Chinese yuan is at 7.2830 to the U.S. dollar, having dropped past 7.36 on Monday. RBI RATE CUT The high likelihood that the Reserve Bank of India will cut rates at Friday's meeting and hedging demand are the reasons cited for the rupee's underperformance. The rupee is the worst-performing Asian currency year-to-date, down nearly 2%. KEY INDICATORS: ** One-month non-deliverable rupee forward at 87.64; onshore one-month forward premium at 18.5 paise ** Dollar index at 107.64 ** Brent crude futures up 0.3% at $74.8 per barrel ** Ten-year U.S. note yield down at 4.42% ** As per NSDL data, foreign investors bought a net $118.2mln worth of Indian shares on Feb. 4 ** NSDL data shows foreign investors sold a net $5.9mln worth of Indian bonds on Feb. 4 Sign up here. https://www.reuters.com/markets/currencies/scant-relief-struggling-rupee-more-dollar-long-unwinding-2025-02-06/
2025-02-06 03:57
MUMBAI, Feb 6 (Reuters) - The Indian rupee hit an all-time low on Thursday amid heightened dollar demand likely spurred by the maturity of positions in the non-deliverable forwards market, while a prevailing bearish bias on the currency also weighed. The rupee fell 0.1% to 87.55, eclipsing its previous record low of 87.4875 hit on Wednesday. Dollar sales by state-run banks though, most likely on behalf of the Reserve Bank of India, helped limit its losses, three traders told Reuters, including one directly familiar with the matter. The offers from state-run banks are "quite strong," but the dollar buying pressure is persistent as well, one of the traders said. The daily dollar-rupee reference rate was quoted at a premium of 0.50/0.60 paisa, signalling heightened demand for the greenback. The rupee has been stuck in a dogged downtrend over the last few months amid a paucity of portfolio inflows, uncertainty of U.S. President Donald Trump's tariff policies and, more recently, expectations of rate cuts by the Reserve Bank of India. The rupee has declined about 2% this year so far, and is the worst performer among Asian currencies. Sign up here. https://www.reuters.com/markets/currencies/rupee-hits-record-low-central-bank-likely-steps-bearish-bias-persists-2025-02-06/
2025-02-06 02:58
BENGALURU, Feb 6 (Reuters) - The Indian rupee is set to become more volatile as the Reserve Bank of India's new governor loosens control over the partially convertible currency as a rampant U.S. dollar exerts relentless downward pressure, a Reuters poll found. The RBI's actions in the market since Governor Sanjay Malhotra's surprise appointment in December suggest the central bank is moving away from its previous policy of burning through foreign exchange reserves to stem the rupee's unabated decline. Having slid about 3% in 2024 and another 2% so far this year, the rupee is expected to trade around 87.23 per dollar at end-February and weaken to 87.63 in six months, according to the Feb. 3-5 Reuters poll of 36 foreign exchange analysts. It was expected to be about 0.6% weaker than current levels at 87.95 in a year's time. U.S. President Donald Trump's tariff threats are also compounding uncertainty for analysts in forecasting where currencies will trade in the near term. "Tariffs, trade wars and counter-tariffs from other countries are reasons why we continue to remain uncertain on a daily basis - we don't know what is going to happen next to give a call on this. So if you assume all these factors, it's a vulnerable currency and a 5% depreciation has been seen on the cards," said Anil Bhansali, head of treasury at Finrex. "I expect the rupee to reach 88-levels by end of March, and it continues to be sold off on every uptick. It's a double whammy for the RBI, surely, because when the rupee is weakening..., the economy is also slowing, which is also an aspect which has to be considered." The range of short-term forecasts for the rupee, overvalued by more than 7% , opens new tab compared to its trading peers, in the latest poll was one of the widest since late 2022. That was around the time when the RBI shifted its stance and started to aggressively intervene in the currency market. Analysts also said expectations of an RBI interest rate cut on Friday are likely to apply further downward pressure on the rupee. Over 70% of respondents, 45 of 62, in a separate Reuters poll forecast the RBI to cut its key repo rate by 25 basis points to 6.25% this week. (Other stories from the February Reuters foreign exchange poll) Sign up here. https://www.reuters.com/markets/currencies/rupee-set-volatile-ride-rbi-eases-control-amid-dollar-strength-2025-02-06/
