2025-01-30 02:57

MUMBAI, Jan 30 (Reuters) - The Indian rupee is likely to stay on the defensive on Thursday, after the U.S. Federal Reserve expectedly kept interest rates unchanged and Chair Jerome Powell said there would be no rush to cut them again. The 1-month non-deliverable forward indicated that the rupee will open around 86.57-86.58 to the U.S. dollar, marginally weaker than Wednesday's 86.54. The dollar index (.DXY) , opens new tab climbed a near one-week high following the Fed's decision before paring gains to trade flat at 107.8 in Asia trading. Referring to the potential impact of policy changes by U.S. President Donald Trump, Powell said that Fed officials are "waiting to see what policies are enacted" before judging the effects on inflation, employment and overall economic activity. Analysts have said that Trump's policies surrounding import tariffs, an immigration crackdown, tax cuts and looser regulation may add to inflationary pressures in the U.S. economy, prompting the Fed to keep rates higher for longer. In the near-term, investors will also keep an eye on whether Trump follows through , opens new tab on his pledge to impose 25% tariffs on Mexico and Canada from Saturday. "Tariffs and not rate differentials are the major FX driver now. But a slightly hawkish Fed can only help a market currently positioned overweight the dollar," ING Bank said in a note. Meanwhile, persistent portfolio outflows are also expected to keep the rupee under pressure, with foreign investors pulling out nearly $9 billion from local stocks and bonds in January so far. Traders reckon the Reserve Bank of India's market interventions should keep a lid on the rupee's volatility. State-run banks, likely on behalf of the RBI, "have been active near 86.60 and that is likely to continue," a trader at a state-run bank said. The rupee has weakened over 1% in January so far and is the worst performer among major Asian currencies. KEY INDICATORS: ** One-month non-deliverable rupee forward at 86.75; onshore one-month forward premium at 17 paise ** Dollar index at 107.83 ** Brent crude futures up 0% at $76.6 per barrel ** Ten-year U.S. note yield at 4.53% ** As per NSDL data, foreign investors sold a net $339.8mln worth of Indian shares on Jan. 28 ** NSDL data shows foreign investors bought a net $113.9mln worth of Indian bonds on Jan. 28 Sign up here. https://www.reuters.com/markets/currencies/pressure-rupee-linger-after-fed-signals-no-hurry-cut-rates-2025-01-30/

2025-01-30 01:33

SAN SALVADOR, Jan 29 (Reuters) - El Salvador's Congress on Wednesday swiftly approved a bill sent just minutes earlier by President Nayib Bukele to amend its bitcoin law to comply with a deal with a key international lender to make acceptance of the cryptocurrency voluntary. The Congress is dominated by lawmakers from Bukele's New Ideas Party. In 2021, El Salvador became the first country to make the cryptocurrency legal tender alongside the U.S. dollar, which it adopted two decades earlier. The move attracted global attention and transformed Bukele into one of bitcoin's most prominent backers. In December, the government struck a $1.4 billion loan deal with the International Monetary Fund (IMF) that scaled back its bitcoin embrace after the lender urged officials to limit its exposure. The lender specifically advocated making acceptance of bitcoin voluntary for the private sector, which is spelled out in the hastily-approved law. Prior to the vote, ruling party lawmaker Elisa Rosales framed the reform as needed to guarantee bitcoin's "permanence as legal tender" while facilitating its "practical implementation." The reform won passage with 55 votes in favor, and only two against. U.S. President Donald Trump's election win late last year, along with the expectation of more favorable cryptocurrency policies from Washington, have sent bitcoin's value to record highs. Bukele's government has recently indicated it will continue buying bitcoin to add to its reserves. Sign up here. https://www.reuters.com/world/americas/lawmakers-el-salvador-rush-new-bitcoin-reform-after-imf-deal-2025-01-30/

2025-01-30 00:58

WASHINGTON, Jan 29 (Reuters) - The U.S. Transportation Department said on Wednesday it plans to rescind a climate rule adopted by the administration of former President Joe Biden requiring states to measure and set declining targets for greenhouse gas emissions from vehicles using the national highway system. Transportation Secretary Sean Duffy, who was tapped by President Donald Trump, approved a proposal to reverse the Biden rule after it had been blocked by a federal court saying it reflected a "commitment to unleashing American energy and eliminating unlawful regulatory burdens." Separately Duffy said Tuesday he was taking the first step to roll back stringent Corporate Average Fuel Economy standards for passenger vehicles and heavy trucks issued under Biden. Texas and 21 other states sued USDOT arguing the agency lacked legal authority to enact the rule in 2023. The Biden administration rule did not mandate specific targets and gave state transportation departments flexibility to set appropriate targets that aimed to reduce emissions over time. The rule said it would assess progress but did not impose penalties for missing targets. In 2018, the first Trump administration repealed a rule issued under then-President Barack Obama requiring states to track highway greenhouse gas emissions. Last week, Trump took aim at electric vehicles, revoking a 2021 executive order signed by Biden that sought to ensure half of all new vehicles sold in the United States by 2030 were electric. Trump also vowed to halt distribution of unspent government money for vehicle-charging stations from a $5 billion fund, called for ending a waiver for states to adopt zero-emission vehicle rules by 2035, and said his administration would consider ending EV tax credits. The Biden USDOT said the rule was "essential" to its target of net-zero emissions economy-wide by 2050, but the final regulation did not require states to set declining targets to align with the 2050 goal. Sign up here. https://www.reuters.com/world/us/us-rescind-biden-highway-climate-rule-states-2025-01-30/

2025-01-30 00:50

U.S. economic growth below estimates in Q4 ECB cuts rates 25 basis points, as expected Dollar index edges higher, euro dips NEW YORK, Jan 30 (Reuters) - The U.S. dollar edged higher against some of its peers including the yen and euro on Thursday as markets weighed fresh tariff threats, slower-than-expected U.S. economic growth, and an interest rate cut by the European Central Bank. President Donald Trump on Thursday said the United States will put a 25% tariff on imports from Mexico and Canada, repeating his warning to the two countries which are top U.S. trade partners. "When Trump says something is imminent, the market is reluctant to believe it or to fully embrace it until the orders are signed and the market was definitely caught off guard there," said Adam Button, chief currency analyst at ForexLive in Toronto. Commerce Department data on Thursday showed the U.S. economy grew by an annualised 2.3% in the fourth quarter, slightly below analysts' expectations, amid weak business spending. Inflation edged higher, with the personal consumption expenditures (PCE) price index rising 2.5%. The ECB cut borrowing costs by 25 basis points, as widely expected, and left the door open to further cuts as concerns over a lacklustre economy supersede worries about persistent inflation. The U.S. dollar jumped sharply against the Canadian dollar following Trump's comments. It was up 0.55% to C$1.45 per dollar. The greenback weakened 0.54% to 154.36 against the Japanese yen . Against the Swiss franc , the dollar strengthened 0.33% to 0.91. The euro reversed earlier gains and was down 0.24% at $1.0395. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.2% to 108.12. "We did see that spike in the euro, but I was struck by (ECB President Christine) Largarde's comment, where she explicitly said 'we have not had a discussion on whether it's time to stop cutting interest rates,'" Button said. The Fed on Wednesday left its benchmark overnight interest rate in the 4.25%-4.50% range, with officials removing the reference that inflation having "made progress" toward the Fed's 2% inflation goal. By contrast, other central banks including Canada and Sweden both cut rates by a quarter point. Brazil's central bank hiked by a full percentage point to 13.25% overnight and flagged more to come. Bank of Japan Deputy Governor Ryozo Himino said on Thursday that Japan's central bank would continue to raise interest rates if the economy and prices move in line with the bank's forecasts. "Traders have already sort of moved on from that Fed meeting, so they've bought at least another six weeks before having to make a decision probably or looking out toward April or May before we have the next live Fed meeting in my view," Button said. Bitcoin gained 1.32% to $105,138.31. Ethereum rose 3.23% to $3,241.76. Sign up here. https://www.reuters.com/markets/currencies/dollar-set-pounce-euro-if-ecb-offers-dovish-guidance-2025-01-30/

2025-01-30 00:48

BRASILIA, Jan 29 (Reuters) - Brazilian and U.S. officials agreed on Wednesday to discuss regularly how Washington will deport migrants from Brazil, as some leaders in Latin America have balked at what they see as poor treatment of their citizens on repatriation flights. Brazil's foreign affairs ministry said in a social media post that the talks will be led by officials from the ministry and the U.S. embassy, after the ministry summoned a senior U.S. diplomat earlier this week over the treatment of recent deportees that local officials condemned as degrading. U.S. President Donald Trump, who took office last week, has escalated a crackdown on unlawful migration to the United States that has included deportations using military planes and shackling of migrants. The ministry noted that the new working group will exchange information and ensure "safety and dignified and respectful treatment" for Brazilians on permitted deportation flights. The ministry added the parties have agreed to establish a direct line of communication to follow flights in real time. The push for increased dialogue over the politically sensitive issue comes after Colombia and the United States pulled back from the brink of a trade war on Sunday provoked by a spat over deportation flights. Justice Minister Ricardo Lewandowski said on Wednesday that Brazilian President Luiz Inacio Lula da Silva had asked Foreign Affairs Minister Mauro Vieira to seek out a new agreement with the United States over the deportations. The president wants to ensure that Brazilians are returned with "a minimum of dignity and that their fundamental rights are respected," Lewandowski said. Sign up here. https://www.reuters.com/world/americas/brazil-us-officials-agree-discuss-how-deported-migrants-are-treated-2025-01-30/

2025-01-30 00:21

Meta forecasts Q1 revenue may not meet analyst expectations Zuckerberg optimistic about AI progress, sees open source as key Zuckerberg: too early to tell if DeepSeek impacts spending plans Jan 29 (Reuters) - Meta Platforms (META.O) , opens new tab beat Wall Street expectations for fourth-quarter revenue on Wednesday but predicted sales in the current first quarter may not meet forecasts, sending mixed signals about how its bets on pricey artificial intelligence-powered tools are paying off. The Facebook and Instagram parent company expects first quarter revenue between $39.5 billion and $41.8 billion, compared with analysts' average estimate of $41.72 billion, according to data compiled by LSEG. It reported revenue of $48.4 billion for the fourth quarter of 2024, well above analysts' estimate of $47.0 billion. Meta shares were flat after the market closed but rose as CEO Mark Zuckerberg spoke optimistically about Meta's AI initiatives and how the launch of Chinese company DeepSeek's models, which tanked global markets this week, reinforced his conviction that open source AI is the right strategy. "There's going to be an open source standard globally," Zuckerberg said on a conference call. "It's important that it's an American standard." The forecast raised fresh questions about Meta's capital spending. The company relies on its core social media ads business to cover the costs associated with its AI ambitions and investments in "metaverse" technologies like smart glasses and augmented reality systems. Last week, Zuckerberg announced that Meta plans capital expenditure of as much as $65 billion in 2025 to expand its AI infrastructure, while also increasing hiring for AI roles. On Wednesday, Meta said it expected total expenses for 2025 to be in the range of $114 billion to $119 billion, up from a total of $95 billion in 2024. "Meta's gangbusters Q4 results clearly demonstrate that ad revenues remain the company's lifeblood. That said, the biggest question heading into 2025 isn't about today's earnings—it's about whether Mark Zuckerberg's $60–65 billion AI infrastructure bet will pay off," said Jeremy Goldman, principal analyst at eMarketer. Family daily active people (DAP), a metric Meta uses to track unique users who open any one of its apps in a day, rose about 5% from a year earlier to 3.35 billion. Meta's results come after DeepSeek's launch of its latest AI models triggered a selloff in global tech stocks on Monday on concerns about rising AI costs in the U.S. DeepSeek has said its models either match or outperform top U.S. rivals at a fraction of the cost, including Meta's own Llama models, challenging the prevailing view that scaling AI requires vast computing power and investment. Zuckerberg said it was too early to tell how DeepSeek's emergence globally will impact Meta's investment and capital expenditure strategy, while noting that Meta's AI teams were already integrating the Chinese company's insights into their plans. "There are a number of things that they have advances that we will hope to implement into our systems," Zuckerberg said, addressing questions about DeepSeek. The breakthrough could heighten scrutiny from investors worried about Meta's heavy spending on AI and metaverse devices, though it may also benefit the world's biggest social media company if it successfully brings down the cost of building and supporting the models. Meta continues to hemorrhage money at its metaverse-oriented Reality Labs unit, which beat sales expectations but still lost about $5 billion in the fourth quarter. Zuckerberg told analysts he believes the business opportunity for Meta in AI lies beyond 2025. Meta — among the top buyers of Nvidia's (NVDA.O) , opens new tab sought-after AI chips — aims to end the year with over 1.3 million graphics processors (GPUs) and bring about 1 gigawatt of computing power online, Zuckerberg said on Friday in a Facebook post outlining the company's 2025 spending goals. The company would continue buying such chips while also working on internally designed custom silicon, said Meta CFO Susan Li. Meta aims to use its own chips to train its AI ranking and recommendations systems - which determine what appears in users' feeds - by next year, she said. Zuckerberg said earlier this month that Meta would lay off 5% of its "lowest performers" and warned employees about more such job cuts this year to raise performance. Sign up here. https://www.reuters.com/technology/meta-reports-upbeat-quarterly-revenue-2025-01-29/