2024-12-31 10:32

MUMBAI, Dec 31 (Reuters) - The Indian rupee fell for a seventh straight year in 2024, largely due to headwinds in the last quarter, including Donald Trump's U.S. election victory-spurred surge in the dollar, while locally, slowing growth and a wider trade deficit weighed. The rupee dropped 2.8% in 2024 to end the year at 85.6150 per U.S. dollar. It fared better than many of its Asian peers, which declined between 3% and 12% due to the dollar's strength and multiple twists and turns in the outlook on U.S. policy rates. The rupee was only marginally weaker at the end of September. But it slid nearly 2.2% in the last quarter and hit multiple record lows, with the lifetime low of 85.8075 coming on Dec. 27. Despite the rupee's struggles in the last three months, it remains the least volatile major Asian currency, excluding the pegged Hong Kong dollar, largely due to the Reserve Bank of India's routine two-sided interventions. When portfolio inflows jumped in the July-September quarter, the rupee benefited only marginally as the central bank absorbed dollar inflows, lifting the country's forex reserves (INFXR=ECI) , opens new tab to an all-time high of $704.89 billion. On the other hand, RBI has routinely stepped in to sell dollars to support the rupee when emerging market currencies struggled due to tensions emanating from the Middle East or uncertainty over the Federal Reserve's outlook. Trump's election victory in November kept the RBI busy. The RBI's efforts to manage the rupee were challenged in the December quarter by developments at home -- India's growth rate dipped, the trade deficit widened and foreigners pressed the sell button on equities. Foreigners have taken out $11.7 billion from Indian equities in the December quarter, compared with inflows of about $12 billion in the first nine months. And as the rupee slid, the forex reserves reflect the RBI's efforts to support the currency. India's forex reserves are now down $60.5 billion from their record-high levels. "We expect INR depreciation to persist in 2025. RBI may change its intervention policy as INR seems overvalued ... along with large reserves already used up in current year," said Anshul Chandak, head of treasury at RBL Bank. In 2025, traders will keep an eye on potential U.S. trade tariffs which may dampen the outlook for emerging market currencies, especially the Chinese yuan. India's growth trajectory will be the other key variable alongside any potential changes in RBI's forex strategies under the new governor. Sign up here. https://www.reuters.com/markets/currencies/india-rupee-drops-7th-straight-year-headwinds-swirl-near-year-end-2024-12-31/

2024-12-31 10:17

JOHANNESBURG, Dec 31 (Reuters) - South African state-owned logistics group Transnet on Tuesday reported a wider loss of 2.2 billion rand ($117.48 million) in the six months to Sept. 30 on higher costs and operational challenges. Transnet made a loss of 1.6 billion rand during the same period last year. The debt-saddled company has struggled to provide adequate freight rail and port services for years due to equipment shortages and maintenance backlogs. Chronic underperformance has stifled exports of key commodities such as coal and iron ore, crimping economic growth in Africa's most industrialised nation. The logistics firm said its revenue rose 6% to 41.5 billion rand in the six months thanks to tariff increases in its rail, port and pipeline businesses. However, higher payroll, security and maintenance expenses drove costs up 10.2% to 27.9 billion rand. ($1 = 18.7258 rand) Sign up here. https://www.reuters.com/world/africa/south-africas-transnet-half-year-loss-widens-117-mln-2024-12-31/

2024-12-31 10:13

PARIS, Dec 31 (Reuters) - France has confirmed bird flu outbreaks on two poultry farms, just days after being officially declared free of the virus, the agriculture ministry said. Highly pathogenic avian influenza (HPAI), commonly called bird flu, has spread across Europe in a seasonal wave linked to migrating birds, though the impact has been less severe than in the United States, where flock losses have led to record egg prices and the virus has been transmitted to cattle and humans. French authorities confirmed the new cases on two farms in the northwestern region of Normandy on Dec. 27 and Dec. 28, the ministry said in a statement late on Monday. "As a direct consequence of these outbreaks, France loses its HPAI-free status that it had just regained on Dec. 15," it said. Disease-free status for bird flu means no farm outbreaks have been reported for at least a month. The classification can allow trade restrictions from importing countries to be lifted. France has credited a vaccination programme, launched a year ago, for curbing the spread of bird flu compared with previous seasons. The plan has focused on farm ducks, notably reared for foie gras pate and seen as particularly vulnerable to bird flu. The country nonetheless remains on high alert for the virus given continued risks of contamination from migrating birds, the ministry said. In a separate notification to the World Organisation for Animal Health (WOAH), the French authorities detailed that the outbreaks occurred on farms with 25,000 and 540 poultry birds, respectively, with the entire flocks culled as a safety measure. Elsewhere in Europe, Germany detected a new bird flu case on a poultry farm in Bavaria, with the 16,000-strong flock also slaughtered, according to a notification to WOAH published on Monday. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/france-reports-bird-flu-two-farms-losing-disease-free-status-2024-12-31/

2024-12-31 10:12

MUMBAI, Dec 31 (Reuters) - The Indian rupee declined to a record closing low for the sixth consecutive session on Tuesday, weighed down by a decline in most Asian currencies alongside expectations that it is headed for more losses in 2025. The rupee closed at 85.6150 to the U.S. dollar, down nearly 0.1% on the last trading day of the year. The unit fell 2.8% in 2024 to post a seventh consecutive annual decline. Asian currencies were mostly weaker with the offshore Chinese yuan down 0.6% at 7.35, its weakest level in over a year, after data showed that China's factory activity barely grew in December. The dollar index dipped 0.1% to 107.9 while U.S. bond yields were a tad lower in Asia trading. For the session, the rupee remained under pressure amid dollar bids from foreign and state-run banks, traders said. A hawkish shift in the Federal Reserve's policy outlook combined with expectations over incoming U.S. President Donald Trump's policies has boosted the dollar and U.S. yields while India's slowing economic growth has added to the pressure on the rupee. "Looking ahead to 2025, the Indian rupee is expected to remain relatively stable in the context of Asian currencies, with a modest depreciation expected," said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. Parmar expects the rupee to trade between 84 and 87 over 2025, influenced by the interest rate differential between India and the U.S., foreign portfolio flows and India's economic fundamentals. In the near-term, investors' focus will be on U.S. labour market data due next week and Donald Trump taking charge for his second U.S. presidential term on Jan. 20. Sign up here. https://www.reuters.com/markets/currencies/rupee-dips-record-closing-low-bearish-bias-tipped-persist-2025-2024-12-31/

2024-12-31 10:10

LONDON, Dec 31 (Reuters) - Britain's domestic energy price cap is expected to rise a further 3% in April, with geopolitical instability keeping wholesale energy prices high, analysts at Cornwall Insight said on Tuesday. The price cap is already set to rise by 1% in January and a further increase would be a blow to Britons hoping energy prices would cool to help them cope with a cost of living squeeze and help curb inflation. "With a Trump presidency on the horizon, and an uncertain geopolitical situation in the Ukraine and the Middle East, wholesale market volatility looks set to remain," Craig Lowrey, principal consultant at Cornwall Insight, said. Energy regulator Ofgem sets a cap on household energy bills each quarter using a formula that reflects wholesale energy prices and also takes into account suppliers' network costs and environmental and social levies. Cornwall Insight forecasts Ofgem’s price cap will rise in April to 1,785 pounds ($2,243) a year based on average use, up from 1,738 pounds a year in January. Benchmark British gas prices have risen around 20% in the past two weeks as colder weather has led to more withdrawals from gas storage sites across Europe and with a deal for Russian gas supplies to flow to Europe via Ukraine set to expire at the end of the year. Lowery said high volatility in the market means the cap forecast could change again before being set by Ofgem towards the end of February. ($1 = 0.7957 pounds) Sign up here. https://www.reuters.com/world/uk/britains-energy-price-cap-rise-3-april-cornwall-insight-says-2024-12-31/

2024-12-31 09:48

LONDON, Dec 31 (Reuters) - The pound was little changed on the final trading day of the year on Tuesday, leaving it on track to be the best performing major currency against the dollar this year as the UK economy has held up better than expected. Sterling has fallen 1.4% across the year as expectations about British and U.S. interest rates have moved broadly in line with each other. That has limited divergence between the two countries' bond yields, which drive currencies by making fixed-income investments more or less attractive. The pound was flat at $1.2554 on Tuesday, having started the year at $1.273. Investors broadly expect the Bank of England to cut interest rates two times next year after two cuts in 2024. BoE officials remain concerned that inflation in services and wages remains too high. "There has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly," the BoE's Monetary Policy Committee said earlier this month. However, sterling was on track for a drop of more than 6% in the fourth quarter, reflecting a rally in the dollar as the U.S. Fed took a tougher stance on inflation as well as signs of weakness in the UK economy. BoE officials were more split than expected as they voted to hold rates this month, with three voting for a reduction. Britain's economy contracted in September and October, the first back-to-back shrinkage since the COVID-19 pandemic. The pound has fared much better against the euro, rising around 4.5% this year. The euro zone economy has slowed more than expected, leading the ECB to cut rates relatively sharply and investors to pencil in more for next year. The euro fell as low as 82.23 pence earlier this month, its weakest in two and a half years and not far off levels seen just after the Brexit vote in 2016, which caused the pound to slide. It last traded 0.1% higher on the day at 82.98 pence . Sign up here. https://www.reuters.com/markets/currencies/steady-sterling-track-best-g10-performance-against-dollar-2024-2024-12-31/