2024-11-07 04:11

MUMBAI, Nov 7 (Reuters) - The Indian rupee declined to a lifetime low on Thursday in the wake of expectations that Donald Trump's victory is likely to boost the dollar in the coming months. The rupee dipped to 84.2950, inching past the previous all-time low of 84.28 hit on Wednesday. Trump's policies of tax cuts and deregulation are likely to lift U.S. growth, prompting investors to prefer the dollar to the other currencies, analysts said, adding that the threat of tariffs is likely to undermine euro and Asian currencies. Asian currencies took a breather on Thursday after slumping by as much as 1.8% in the previous session. The dollar index slipped 0.1% to 104.9. Traders expect the Reserve Bank of India to continue intervening to prevent sharp moves in the rupee, which is evident in the currency's muted implied volatility compared to its regional peers. The RBI is "slowly letting it (USD/INR) move higher but the upside should be limited near 84.40 in the near term," a trader at a state-run bank said. Meanwhile, persistent outflows from Indian stocks are another pressure point for the currency. Foreign investors have sold more than $1.5 billion of equities in November so far, adding to $11 billion of outflows in the previous month. Benchmark Indian equity indices, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab, were down about 0.5% each on the day. The RBI intervention and India's inflation differential with the rest of the world will determine the potential for further rupee depreciation, Citibank analysts said in a note. Investors now await the U.S. Federal Reserve's policy decision due post-midnight IST. The Fed is widely expected to cut rates by 25 basis points while investors will pay attention to Chair Powell's commentary for cues on the future path of benchmark interest rates. Sign up here. https://www.reuters.com/markets/currencies/indian-rupee-drops-all-time-low-bullish-dollar-outlook-2024-11-07/

2024-11-07 03:09

MUMBAI, Nov 7 (Reuters) - The Indian rupee is likely to open near its lifetime low on Thursday and possibly decline further through the session, fueled by bets that Donald Trump's U.S. presidency will herald a period of a stronger dollar and higher U.S. interest rates. The 1-month non-deliverable forward indicated that the rupee will open near its close, and all-time low, of 84.28 in the previous session. "It's fairly obvious that the risks (on dollar/rupee) will be on the upside for the time being. When you think of levels, plainly the next one is 84.50," a currency trader at a bank said. "I think the question now is how adamant the RBI (Reserve Bank of India) will be in its defence (of rupee) in the face of the extensive dollar up move." The rupee suffered its worst day in 4-1/2 months on Wednesday, mirroring the slump in other Asian currencies amid uncertainty over what a Trump presidency will bring. The renewed tariff threat following Trump's victory prompted investors to dump the Chinese yuan and other Asian currencies. The offshore yuan plunged 1.4% on Wednesday, in the biggest decline in half a decade. It was a similar story for most Asian currencies with the Thai baht down 2% and the Korean won 1.7%. The rupee's losses in the session would have been larger had it not been for the RBI's intervention. It was not the only central bank keeping a watchful eye. Indonesia's central bank prepared mitigation efforts to stabilise the rupiah, including intervention in the foreign exchange market in case of excessive volatility. China's state-run banks sold dollars to support the yuan. FED RATE CUTS The Federal Reserve is widely expected to cut rates by 25 basis points just after midnight India time, and most analysts reckon that the central bank's ability to deliver many more rate cuts has been constrained by Trump's victory. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.38; onshore one-month forward premium at 10.50 paisa ** Dollar index down at 105.04 ** Brent crude futures up 0.9% at $75.6 per barrel ** Ten-year U.S. note yield at 4.43% ** As per NSDL data, foreign investors sold a net $206.7 mln worth of Indian shares on Nov. 5 ** NSDL data shows foreign investors bought a net $123.5 mln worth of Indian bonds on Nov. 6 Sign up here. https://www.reuters.com/markets/currencies/trump-win-fuelled-rally-dollar-us-rates-keep-rupee-under-strain-2024-11-07/

2024-11-07 00:39

TOKYO, Nov 7 (Reuters) - Japan's top currency diplomat Atsushi Mimura flagged on Thursday readiness to act against the weaker yen, in the government's strongest warning against speculators in recent months as the yen plunged to fresh three-month lows. "We are ready to take appropriate actions against excess moves," Mimura told reporters. Describing recent currency moves as "one-sided and drastic," he said Japanese authorities were "closely watching developments on the currency market, including those driven by speculators, with utmost urgency." Mimura's latest warning is the strongest since he replaced Masato Kanda in late July. Kanda launched the biggest yen-buying intervention on record this year and aggressively jawboned speculators against pushing down the Japanese currency too much. The dollar soared against major currencies after Republican Donald Trump won the U.S. presidential election, with policies on immigration, tax and trade expected to spur higher U.S. growth and inflation. The yen was up 0.22% at 154.30 per dollar on Thursday morning, after touching 154.7 on Wednesday, its lowest against the greenback since July 30. Sign up here. https://www.reuters.com/markets/currencies/japan-top-fx-diplomat-says-recent-yen-moves-drastic-one-sided-2024-11-07/

2024-11-07 00:23

Fed cuts rates by 25 bps as expected Powell says election won't impact near-term Fed policy Traders seen taking profits from Trump trades Nov 7 (Reuters) - The dollar held onto earlier losses on Thursday after Federal Reserve Chair Jerome Powell failed to offer any strong clues that the U.S. central bank was likely to pause rate cuts in the near-term, after a widely expected 25 basis point reduction. Traders also closed out some profitable bets on a Donald Trump presidency after his election victory on Tuesday. Fed policymakers took note of a job market that has "generally eased" while inflation continues to move towards the U.S. central bank's 2% target. A much stronger than expected jobs report for September raised expectations that the Fed may make fewer rate cuts, though was followed by surprisingly weak data for October. Analysts said that jobs gains last month were hurt by hurricanes and labor strikes. In Powell's comments "there was no indication that a pause is under consideration at the Fed. It sounds like they want to get below 4% or very close before thinking about pausing. That's a surprise given the strength of economic data," said Adam Button, chief currency analyst at ForexLive in Toronto Powell also said that the election won't impact Fed policy in the near-term, saying the U.S. central bank won't speculate on how policies will affect Fed goals. Traders are pricing 75% odds the Fed will cut rates again in December, up from 69% on Wednesday, according to the CME Group's Fed Watch Tool. The dollar index was last down 0.67% at 104.40. It hit a four-month high of 105.44 on Wednesday as investors priced in Trump policies. Trump is expected to clamp down on illegal immigration, enact new trade tariffs, maintain or introduce new tax cuts and loosen business regulations, which analysts see as boosting growth and inflation. The dollar weakened on Thursday, however, as traders closed some of these positions. "In the three weeks prior to the election there was a lot of dollar buying and positioning was already quite long the dollar, so I think today's reversal is probably explained by some of these red sweep trades that were put on before the election maybe being partially squared,” said Vassili Serebriakov, an FX strategist at UBS in New York. Republicans also won the Senate majority, putting the party on track for a clean sweep that would allow it to make larger legislative changes. They are leading the race to win the House of Representatives, though this has yet to be decided. Serebriakov added that further large gains in the U.S. currency may be unlikely before the impact of new policies including tariffs is felt over the coming two years. Some market participants are also speculating that tariffs may be used as a negotiating tool and that Trump won't necessarily introduce all the policies he has campaigned on. "The market is pricing in a return of the first version of Trump, not the guy who is saying he's putting on 10 percent across-the-board tariffs," said Button. Sterling rose after the Bank of England cut interest rates by 25 basis points but said it expected UK inflation and growth to pick up more quickly than it had previously anticipated. It was last up 0.78% at $1.2979. The euro rose 0.62% to $1.0794. The single European currency shrugged off political crisis in Germany, where the already awkward coalition led by Chancellor Olaf Scholz collapsed late on Wednesday. The greenback fell 1.05% to 153.01 yen . The Japanese currency is likely to be hurt by a wide interest rate differential with the United States following Trump's victory. That could heighten pressure on the Bank of Japan to raise interest rates as soon as December to prevent the yen from sliding back toward three-decade lows. Sweden's Riksbank cut rates by half a point, as expected, leaving the crown up 1.74% against the dollar , while Norges Bank left Norwegian rates unchanged, with the greenback tumbling around 1.8% against the currency . Bitcoin gained 0.74% to $76,543, after earlier reaching a record $76,980. Trump is expected to enact a more favorable regulatory environment for the crypto industry. Sign up here. https://www.reuters.com/markets/currencies/firm-dollar-keeps-peers-back-foot-ahead-boe-fed-decisions-2024-11-07/

2024-11-06 23:50

LAUNCESTON, Australia, Nov 7 (Reuters) - Commodities reacted with trepidation to the election of Donald Trump to a second term as U.S. President, with most losing ground over fears the global economy will be hit by a new tariff war. The downbeat reaction was in stark contrast to U.S. equities, which surged to record highs amid optimism that Trump's agenda of lower taxes will boost growth, at least in the United States. The contrasting response to Trump's victory over Democrat nominee and now outgoing U.S. Vice President Kamala Harris showed exactly why the likely impacts of Trump's return to the White House are hard to assess. Take crude oil for example. The world's most important commodity dipped when it became clear that Trump would prevail in Tuesday's vote, with global benchmark Brent futures dropping as much as 2.9% during Wednesday's trade, before ending the down 0.5% at $75.16 a barrel. In theory, Trump's energy policies should be somewhat bearish for global oil prices, as he is in favour of loosening regulation of the sector in the United Stares, and encouraging even higher output in the world's biggest crude producer. In practice, U.S. oil output may not move much higher, given it is already at record levels and companies will be wary about boosting production if they believe the impact will be to weaken prices further. Trump has also promised to bring peace to the Middle East, without specifying how this will be accomplished. But on the assumption he is able to convince Israel to end its conflict with Iran and the groups it supports, such as Hamas and Hezbollah, this would be bearish for oil prices as the geopolitical risk premium would dissipate. Trump's affinity for Russia's President Vladimir Putin, and another unspecified promise to end the Ukraine conflict, may also result in easing sanctions against Russia, which in turn may boost its exports of crude oil and other energy products such as liquefied natural gas and coal. On the other hand, Trump has made it clear he aims to go hard against Iran, and may try to tighten sanctions against Tehran, which in turn may make it slightly harder for Iran to sell its crude. Trump's plan to impose tariffs of 10%-20% on all U.S. imports, and up to 60% from those from China, is also likely to hurt crude prices, given it would likely curtail global trade, leading to slower economic growth and the risk of higher inflation and interest rates. Overall, the main risks for crude appear to be to the downside, complicating the task for OPEC and its allies in the wider OPEC+ group to set a production policy that tries to keep prices high enough, without the group having to give up too much market share. LNG is another commodity that in theory may face a more bearish outlook under Trump, given his support for expanding U.S. production and the construction of new export plants. But again, much will depend on Trump's trade policy. If comprehensive tariffs are placed on all imports into the United States, it's likely that countries will respond with tit-for-tat tariffs on their imports of U.S. goods. This means that U.S. LNG, and indeed crude oil and coal, may cost more than alternatives, meaning that U.S. producers may have to discount prices to remain competitive, or hope that tariffs aren't placed on their products. METALS STRUGGLE The prospects for industrial metals appear bleaker than for energy commodities, especially since they are more exposed to China, the world's biggest buyer of copper and iron ore. London copper contracts slumped 4.1% on Wednesday, ending at $9,343 a metric ton, the weakest close in nearly two months. Singapore iron ore futures fared somewhat better, but still ended down 1.2% at $104.16 a ton, while zinc contracts in London dropped 4.2% to $2,973 a ton. Iron ore is the key raw material used to make steel, while zinc is mainly used to galvanise steel. Both are heavily exposed to China, and therefore face the prospect of lower demand if exports from the world's second-biggest economy are hit by Trump's planned tariffs, and the likely accompanying slowdown and re-ordering of global trade. Another commodity that is likely to play a wait and watch game is gold, with the spot price dropping 3.1% on Wednesday to end at $2,659.24 an ounce. The decline was largely because of a surging U.S. dollar, but gold also faces contradictory pressures from a Trump presidency. Higher bond yields and interest rates, caused by Trump's likely inflationary tariffs and tax cuts, will cut the appeal of gold. But the precious metal may also benefit from the possible volatility of a Trump presidency, which may heighten geopolitical risk and encourage investors to diversify assets. Overall, Trump's second term comes with more downside risks for commodities, but much will depend on how much of his economic and political agenda he is able to implement, and how quickly it is done. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/commodities-weaken-amid-heightened-risks-trumps-second-term-russell-2024-11-06/

2024-11-06 23:39

Nov 6 (Reuters) - APA Corp (APA.O) , opens new tab reduced 2025 capital forecast after the U.S. oil and gas firm missed third-quarter profit estimates by one cent per share on Wednesday, as lower prices offset higher production. Oil prices fell in the quarter after a larger-than-expected Federal Reserve interest rate cut sparked concerns about the U.S. economy and global demand. The company said quarterly average oil price was down 9.4% at $78.06 per barrel, compared with last year. However, quarterly oil production was up 23.4% at 256,306 barrels of oil per day (bopd) from the previous year, but natgas production was down 4% to 786 millions of cubic feet per day (MMcfpd) in the same period. Last month, the U.S. shale producer said it curtailed about 103 MMcfpd of natural gas production in the third quarter, in response to weak commodity prices. APA has curtailed production in all three quarters of fiscal 2024. APA said it plans to reduce capital in the range of $2.5 billion to $2.6 billion as a result of a softer oil price outlook, below its current year expectation of $2.7 billion. The Houston, Texas-based company also said its upstream capital investment in the fourth quarter is expected to be about $645 million, which includes $80 million of incremental capital for Suriname, Alaska and Egypt. Last month, France's TotalEnergies (TTEF.PA) , opens new tab and APA announced a positive investment decision for Suriname's most promising oil and gas project, costing $10.5 billion, Block 58, expected to inaugurate the nation's offshore output. The company reported an adjusted profit of $1 per share for the quarter ended Sept. 30, compared with analysts' average estimate of $1.01 per share, according to data compiled by LSEG. Sign up here. https://www.reuters.com/markets/commodities/apa-corp-misses-third-quarter-profit-estimates-lower-prices-2024-11-06/