2025-02-05 12:04

Wheat, soy purchases for foreign aid halted since Trump review State Department waiver exempted food from aid freeze Freeze leaves farmers and aid groups scrambling Feb 5 (Reuters) - The U.S. has stopped purchases for foreign food aid programs since the Trump administration began a sweeping review of federal aid spending, despite a waiver issued nearly two weeks ago for food assistance, according to nine sources. The freeze in purchases of wheat, soybeans and other commodities produced by U.S. farmers could hinder or halt the operations of organizations that provide millions of tons of food each year to help alleviate poverty in countries such as Madagascar, Tanzania and Honduras, the sources said. It also means added pain for U.S. farmers, already facing low commodity prices and uncertainty from potential tariffs in an emerging trade war, and who see foreign aid programs as opportunities to promote their farm products abroad, four of the sources said. The sources requested anonymity for fear of retribution. "Down the road it could definitely lead to more vulnerable populations not being able to access food," said Virginia Houston, director of government affairs for the American Soybean Association. "It also hurts our supply chains," she said. Commodity purchases and shipments for the Food for Progress, Food for Peace, and McGovern-Dole Food for Education programs were frozen after Trump signed a Jan. 20 executive order - shortly after his inauguration - pausing U.S. foreign aid for 90 days, two sources told Reuters. It was unclear why the food purchases remained halted into February, however, after Secretary of State Marco Rubio on Jan. 24 issued a waiver to the aid freeze for food assistance. That waiver , opens new tab applies to "core life-saving medicine, medical services, food, shelter, and subsistence assistance". "This one just kind of got thrown out with the bathwater," said one source who works to implement U.S. government food aid contracts. The U.S. Department of Agriculture and State Department did not respond to requests for comment. The USDA administers Food for Progress and Food for Education, while USAID, a State Department agency that has been functionally shuttered by the Trump administration, administers Food for Peace. In 2024, USDA purchased more than a million metric tons of U.S. crops, including soybeans, rice, and wheat, for a total of more than $510 million across the three programs, according to agency data. Planned grain sales for Food for Progress alone in January and February totaled about 315,000 metric tons, worth $150 million, said one source familiar with the program contracts. Food for Peace, meanwhile, provided nearly 4 billion pounds of American-grown food to 58 million people globally in 2022, according to the U.N. World Food Programme, which counts the U.S. as its largest single donor. Seven sources said the USDA has not issued any communication about the pause in purchases. One organization that received an award from Food for Progress in 2024 told Reuters it expected a $1.5 million installment of their grant this week but has not heard anything from the agency. "COULD BE DEVASTATING" About 60,000 metric tons of soy products worth $23 million, bought under the Food for Progress program, cannot be delivered, American Soybean Association's Houston said. Grants to purchase 235,000 metric tons of U.S. wheat under Food for Progress have also been paused, said Dalton Henry, vice president of policy for U.S. Wheat Associates, a trade group that promotes exports. "We hope to see that pause lifted," Henry said. "It is an important program that uses U.S.-grown wheat to support development projects and, in the process, gives us a chance to showcase the quality and value of U.S. wheat in local markets." Purchases of U.S. wheat for aid programs have recently ranged from about 250,000 metric tons up to about 1 million metric tons per year, the group said. Other deals for 25,000 metric tons of rice and 20,000 metric tons of soybean meal are "circling the drain" due to the freeze, according to the source that works to implement aid contracts. Those deals were in the works before Trump was inaugurated. For farmers, the loss of sales to food aid programs could be devastating, said Gordon Stoner, a retired farmer in Montana who sold peas for food aid in 2021. "They're a large buyer and suddenly if this U.S. aid program remains suspended, or terminated, or whatever the administration is doing, that market goes away for us," Stoner said. Sign up here. https://www.reuters.com/markets/commodities/us-food-purchases-foreign-aid-halted-despite-waiver-sources-say-2025-02-05/

2025-02-05 11:57

Euro may hit parity with dollar, a third of FX strategists predict US dollar strength supported by robust economy and high bond yields Market volatility expected to continue amid Trump's tariff and tax policies BENGALURU, Feb 5 (Reuters) - A crowded strong U.S. dollar trade is set to get more bunched up in coming months, with near one-third of currency strategists polled by Reuters now expecting the euro to fall to parity with the dollar or below versus only one-fifth last month. The greenback (.DXY) , opens new tab has been on a rampage since late September, soaring over 7% against a basket of major currencies and hammering the euro down to almost $1.01 on Feb. 3 - just a whisker away from parity, a milestone last hit in November 2022. Recent data from the U.S. Commodity Futures Trading Commission also showed swathes of speculators piling on "bullish" dollar trade, stretching net-long bets to a near-decade high last month. That strength will not falter any time soon, according to FX strategists in a Feb. 3-5 Reuters survey, with an 85% majority - 40 of 47 - saying current positioning would hold steady or even see a further increase in net longs by the end of February. "The view on the dollar is bullish predominantly due to the escalating trade conflict, with our baseline forecast of the euro testing parity in Q1," said Meera Chandan, head of FX at J.P. Morgan. Chandan added that higher bond yields, robust U.S. economic growth and a still-strong equity market provided additional support to that forecast. Continued U.S. economic resilience and President Donald Trump's potentially inflationary tariffs and tax-cut policies have put the brakes on market expectations for further Federal Reserve rate cuts, helping lock in the currency's gains. "Beyond Q1, U.S. exceptionalism will eventually run out of steam which should cause the dollar to weaken over the longer run, but conviction on when this turning point will happen is quite low,” Chandan added. Some analysts also cited Trump's erratic policy announcements, making forecasting more difficult than usual - year-ahead euro estimates are the most varied since May. 'POLITICAL KRYPTONITE' "We've seen just how sensitive the market is to headlines every day as the clouds of tariff uncertainty hang over the market. If we do get a trade war and tit-for-tat, then that has negative inflation and growth implications, and inflation right now is political kryptonite," said Alex Cohen, FX strategist at Bank of America. The latest poll found near one-third of FX strategists - 20 of 66 - seeing euro-dollar tumbling to parity or lower in their three-, six- or 12-month point forecasts - a considerably sharper tilt towards dollar dominance than in a January survey. The median survey view was for the euro to hold steady over the coming three and six months at $1.03, and strengthen about 2% in the second half of the year to $1.05 at end-January. The weakest euro forecast of $0.97 was also the lowest in two years. After years of calling for dollar weakness, often incorrectly, analysts have started showing signs of a reversal in the past few months. Nearly half saw the euro, also hit by expectations for a continued series of European Central Bank rate cuts, trading weaker in the coming six months than they did in the January survey. Fed policymakers have echoed the need for slower rate cuts, leading interest rate futures to currently price just one more this year, wavering on a second - a far cry from nearly double the amount markets bet on last quarter. "We're in a place where the dollar is priced for everything positive, and as long as those things don't change, we're not going to fall back too much. It's going to be very choppy from here - a lot of volatility without necessarily going anywhere," said Dan Tobon, head of G10 FX at Citi. "Markets won't really pull back too deeply on the dollar now - we still have tariff risks for the next couple of months and U.S. growth outperformance should keep the Fed relatively more hawkishly priced compared to other major central banks." (Other stories from the Reuters February foreign exchange poll) (This story has been corrected to fix the title of Meera Chandan to co-head global FX strategy, not head of FX, in paragraph 5) Sign up here. https://www.reuters.com/markets/currencies/more-crowded-us-dollar-trade-ramps-up-expectations-euro-parity-2025-02-05/

2025-02-05 11:43

ATHENS, Feb 5 (Reuters) - Hundreds more people were expected to leave Greece's Santorini island on Wednesday as tremors shook the popular summer tourist destination for a sixth day. About 6,000 people have left on ferries and planes in recent days as hundreds of small quakes were registered in the surounding sea, shaking buildings, kicking up dust on the island's rocky cliffs, and raising fears of a major earthquake. The island's population swells in summer when millions of tourists visit the traditional white-painted villas that line its steep hillsides. The 2021 census puts Santorini's permanent population at 15,000, so it is likely that several thousand remain on the island, given that it is off-season. Authorities have introdcued safety measures, including halting construction, shutting schools on Santorini and the nearby islands of Ios, Amorgos and Anafi, and ordering residents and hotels to empty their pools to reduce the burden on the ground. Three ferry routes from the port of Piraeus to Santorini and vice versa were cancelled on Wednesday due to rough seas. Bad weather was not expected to disrupt six Aegean Airlines flights, including two emergency ones, scheduled for Wednesday. Seismologists estimate that the high seismic activity could take days or weeks to abate, although locals and government officials said the shaking had subsided on Wednesday. "It has not shaken much today, I haven't felt anything since 0400 (0200GMT)," said Nikos Sakorafos, owner of a travel agency in the popular tourist village of Fira. "Now, it's a dead season for the island, most people don't have work so it's easier for them to leave." The government is due to hold a briefing over the situation later on Wednesday. Greece is one of the most earthquake-prone countries in Europe as it sits at the boundary of the African and Eurasian tectonic plates whose constant interaction prompts frequent quakes. Santorini took its current shape following one of the largest volcanic eruptions in history, around 1600 BC. The last eruption in the area occurred in 1950. Sign up here. https://www.reuters.com/world/europe/evacuation-greeces-santorini-island-continues-tremors-persist-2025-02-05/

2025-02-05 11:18

LONDON, Feb 5 (Reuters) - Jewellery maker Pandora on Wednesday said additional U.S. tariffs on imports from China imposed by U.S. President Donald Trump have had a limited impact on the company, which makes its charm bracelets and other products at two factories it owns and operates in Thailand. Pandora had been anticipating tariffs and working to limit the amount of imports to the U.S., its biggest market, from China, chief financial officer Anders Boyer told analysts on a fourth-quarter results call on Wednesday. He said the impact of the additional tariffs would be quite limited at around 15 million Danish crowns ($2.09 million) per year. Pandora imports items like displays, signs, jewellery boxes, shopping bags and store furniture from China. Trump has threatened to impose tariffs on a wide range of countries, and Boyer outlined Pandora's scenario in case of tariffs on Thailand, currently its only production hub. A 10% tariff on imports to the U.S. from Thailand would have an annual impact of 350 million to 400 million Danish crowns ($48.86 million to $55.84 million), he said. Pandora is currently building a new factory in Vietnam, which it expects to open in early 2026. Pandora reported 2024 revenue of 31.68 billion Danish crowns ($4.42 billion), with organic growth of 13%, but forecast lower growth for 2025. ($1 = 7.1629 Danish crowns) Sign up here. https://www.reuters.com/business/retail-consumer/pandora-says-us-tariffs-china-have-limited-impact-2025-02-05/

2025-02-05 11:17

A look at the day ahead in U.S. and global markets from Mike Dolan As the week's tariff rollercoaster levels out a bit, Wall Street stocks are tilting lower again - clouded by a poor reception for Alphabet's results, lingering China tariff hike plans and fresh interest rate rise speculation in Japan. U.S. stock futures were back in the red ahead of Wednesday's bell as shares in megacap Alphabet (GOOGL.O) , opens new tab plunged 7% overnight. The drop came amid doubts about the Google parent's cloud computing business, much like Microsoft last week, and anxiety about its huge investment in artificial intelligence - especially in the light of last week's DeepSeek news. Following the previous day's sideswipe from Beijing on an anti-monopoly probe into Google there, Alphabet said it would spend $75 billion on its AI buildout this year, 29% more than Wall Street expected, and it missed its cloud revenue target. Adding to the overnight pressure, shares in Advanced Micro Devices (AMD.O) , opens new tab fell 9% after the company's AI chip revenue failed to meet lofty expectations. With a deluge of earnings updates across the world this week, the news on global macro policy did not help either. Japan's yen surged to its best levels of the year so far after domestic wage numbers rekindled talk of another Bank of Japan rate hike this year. Japan's December inflation-adjusted real wages rose 0.6% year-on-year thanks to a wintertime bonus bump, with government officials expressing optimism that wage hike momentum is growing. "We will continue to raise interest rates and adjust the degree of monetary support, if underlying inflation accelerates toward 2% as we project," Kazuhiro Masaki, director-general of the BOJ's monetary affairs department, told parliament. As Chinese markets returned from the week-long lunar new year holiday, there was a lot to unpack - not least this week's 10% U.S. tariff hikes on Chinese imports, planned retaliation from Beijing by Feb. 10 and the DeepSeek AI developments. But both mainland China and Hong Kong stock indexes fell on Wednesday as prior day's hopes of a meeting between U.S. President Donald Trump and China's President Xi Jinping to avert the tariff war were doused. U.S. plans to slap tariffs on Canada and Mexico were postponed for a month this week after similar calls between Trump and the leaders of those countries. Trump said late on Tuesday he was in no hurry to speak to Xi. White House spokeswoman Karoline Leavitt told reporters a Trump-Xi call still needed to be scheduled. EMPLOYMENT NUMBERS Adding to the tension, the U.S. Postal Service said it would temporarily suspend parcels from China and Hong Kong as Trump ended a trade provision this week used by retailers including Temu and Shein to ship low-value packages duty-free to America. And in the background, private sector business surveys showed China's services activity expanded at a slower pace in January, with the Lunar New Year holidays worsening employment. The currency reaction was a bit more mixed, however. While the onshore yuan , guided closely by the People's Bank of China, was reset slightly weaker after the holiday break, the offshore yuan strengthened for the second day. The combination of yen and yuan gains weighed on the dollar index (.DXY) , opens new tab more broadly. And a retreat in U.S. Treasury yields dragged on the greenback to boot, with the 10-year slipping back below 4.5%. Treasury yields ebbed on a mix of trade war angst and the latest employment update, which showed U.S. job openings falling more than expected in December. That takes some of the perceived heat out of the labor market and allows more wiggle room for the Federal Reserve to keep easing policy. "I continue to see a gradual reduction in the level of monetary policy restraint placed on the economy as we move toward a more neutral stance," Fed Vice Chair Philip Jefferson said on Tuesday. "That said, I do not think we need to be in a hurry to change our stance." Two Fed cuts this year are virtually fully priced for the year - resuming around mid-year. In a big week for employment numbers, private sector payrolls for January will be released by ADP later on Wednesday and the national payrolls report is due on Friday. Elsewhere, geopolitical tension added to trade war worries - with Trump's statement on the United States taking over Gaza confounding many who assumed he wanted to withdraw the country from foreign conflicts and remove expensive U.S. military and aid funds from around the world. Much like the puzzlement over similar contradictions in trade and currency policy, the statement left more confusion about the road ahead. Gold seemed the only real beneficiary of the uncertainty and set another new record with gains of almost 10% for the year so far. In other corporate news, the Nikkei newspaper said Japan's Nissan (7201.T) , opens new tab will call off merger talks with rival Honda (7267.T) , opens new tab - abandoning a tie-up that would have created the world's third biggest automaker. Nissan shares fell 4% and Honda's rose 8%. Key developments that should provide more direction to U.S. markets later on Wednesday: * U.S. January private sector payrolls from ADP, Jan service sector surveys from ISM and S&PGlobal, December international trade balance; Canada Dec international trade * Federal Reserve Vice Chair Philip Jefferson, Fed Board Governor Michelle Bowma, Chicago Fed President Austan Goolsbee and Richmond Fed chief Thomas Barkin all speak; European Central Bank chief economist Philip Lane speaks in Washington * U.S. corporate earnings: Qualcomm, Boston Scientific, Walt Disney, Ford, News Corp, T Rowe Price, MetLife, Uber, Mckesson, Coognizant, Corpay, Allstate, Emereson Electric, Align Technology, Molina, STERIS, Bunge, Johnson Controls, etc Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2025-02-05/

2025-02-05 11:17

MUMBAI, Feb 5 (Reuters) - The Indian rupee weakened to a record low on Wednesday as a sharp decline in the afternoon triggered stop losses amid a prevailing bearish bias on the currency and as traders positioned for a potential rate cut later this week. The rupee weakened to 87.4875 against the U.S. dollar before closing at 87.4650, down 0.4% on the day. The currency has declined over 2% so far in 2025 and is the worst performer among major Asian currencies. Persistent foreign outflows, uncertainty surrounding U.S. trade tariffs and expectations of domestic rate cuts have all weighed on the rupee. Dollar sales by state-run banks near the 87.25 level offered support to the rupee earlier in the session but the currency fell sharply in the afternoon, triggering stop losses which aggravated its decline. Dollar demand from foreign banks and importers also pressured the currency, a trader at private bank said. "Since its (USD/INR) rise above 87, there is some panic buying happening from importers," the trader said. The rupee had declined past 87 on Monday as U.S. President Donald Trump's tariffs on Canada, Mexico and China rattled global markets. The next day brought some reprieve for the currency as levies on Canada and Mexico were delayed. The dollar index was down 0.4% on Wednesday, while most Asian currencies gained but that did little to help the rupee with traders anticipating a 25-basis point rate cut by the Reserve Bank of India on Friday. "While we believe RBI has become more tolerant of FX depreciation, as its focus has shifted towards supporting growth, the global backdrop remains fluid and, at this juncture, the RBI may err on the side of caution," Nomura said in a note. Although the brokerage expects a 25-bp reduction this week, it said that the chances of a "dovish surprise" via an outsized rate cut or a change in stance, remain low. Sign up here. https://www.reuters.com/markets/currencies/rupee-drops-record-low-rbi-rate-cut-bets-stop-losses-2025-02-05/