2025-12-17 03:05

MUMBAI, Dec 17 (Reuters) - The Indian rupee soared on Wednesday to post its best one-day gain in two months as heavy-handed intervention by the Reserve Bank of India halted its five-day long slide and blunted budding speculative pressure against the currency. The rupee closed at 90.38 per U.S. dollar, up 0.7% from its close of 91.0275 in the previous session. Sign up here. The currency had dropped to its all-time low of 91.0750 in the previous session. It jumped sharply a little after the spot market opened on Wednesday as the RBI stepped in to shore it up, traders said. The intervention echoed the central bank's actions in October and November, when it intervened aggressively to disrupt persistent one-way moves in the rupee. The currency had declined nearly 2% over December before the RBI's intervention. The central bank's move on Wednesday signalled "its discomfort with rapid depreciation (of the rupee) beyond recent ranges," said Abhishek Goenka, chief executive at FX advisory firm IFA Global. "While the broader bias for USD/INR remains influenced by trade deal and capital flow dynamics, today's action reinforces the RBI's role as a stabiliser rather than a defender of fixed levels," he said. The rupee is Asia's worst performing currency this year, pummelled by a stalemate in U.S.-India trade talks, record portfolio outflows, and sustained corporate caution around further weakening of the currency. Clearing house data showed importer activity remained elevated in November while exporters held back, as the rupee remained under pressure. This skew has been a strain on the rupee over recent months. The currency's slide has pushed it into "undervaluation" territory but investors remain wary of lapping up Indian stocks and bonds as a missing trade agreement with the U.S. leaves it exposed to further weakness. Meanwhile, a broadly stronger dollar hurt most Asian currencies on Wednesday. The dollar index rose nearly 0.4% to 98.6. https://www.reuters.com/world/india/rupee-may-catch-breather-after-swift-decline-softer-dollar-helps-margin-2025-12-17/

2025-12-17 00:15

Dec 16 (Reuters) - U.S. President Donald Trump is expected to sign an executive order as soon as this week that would fast-track the reclassification of cannabis, NBC News reported on Tuesday, citing four people with direct knowledge of the plans. Trump told reporters on Monday he was considering the move, noting that the reclassification would allow for cannabis research. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/trump-expected-sign-executive-order-fast-track-reclassification-cannabis-nbc-2025-12-17/

2025-12-17 00:12

LONDON, Dec 17 (Reuters) - The British government said on Wednesday it will provide financial support to safeguard chemical production and hundreds of jobs at Grangemouth, the country's last ethylene plant, in a partnership with chemicals group INEOS. Ethylene is used in medical-grade plastics and the wider chemical supply chain, including water treatment, as well as key industries such as advanced manufacturing, automotive and aerospace. Sign up here. Grangemouth, in Scotland, was Britain's oldest oil refinery, but crude oil processing there ended in April. Operator Petroineos said the facility was closed after losing about $500,000 a day and becoming uncompetitive with larger, more modern refineries in the Middle East, Africa and Asia. After the refinery closed, the plant's primary operation shifted to the production of chemicals such as ethylene. INEOS said it was investing 150 million pounds ($201.20 million) at its Grangemouth site, backed by a 75-million pound government loan guarantee and a 50-million grant. According to the government, the package is intended to safeguard operations at the site while improving energy efficiency, reducing carbon emissions and boosting productivity. "The UK government's decision to step in will protect Grangemouth as a site of strategic national importance and secure 500 vital jobs in the area," said business minister Peter Kyle. "By partnering with INEOS we are backing the plant and its long-term future, giving certainty to workers and the supply chain going forward," he added. The chemicals sector across Europe has faced significant challenges , opens new tab in recent years, including high energy costs, with around 40% of remaining European ethylene capacity having recently closed or remaining at risk. The decision to protect chemicals production at Grangemouth follows the government's announcement in August that it would not provide financial support to the struggling bioethanol industry, leaving a sector already battered by the UK's tariff deal with U.S. President Donald Trump facing imminent collapse. ($1 = 0.7455 pounds) https://www.reuters.com/business/energy/uk-provide-financial-support-save-its-last-ethylene-plant-2025-12-17/

2025-12-16 23:03

SAO PAULO, Dec 16 (Reuters) - Brazil's state-run oil company Petrobras (PETR3.SA) , opens new tab signed a deal to acquire 49.99% of Lightsource bp's subsidiaries in the country, the firms said in a statement on Tuesday. The new partnership, which marks Petrobras' entry into the solar energy segment, will be structured as a joint venture and aligns with the Brazilian firm's 2026–2030 business plan to diversify its portfolio. Sign up here. Financial details about the agreement were not disclosed. Lightsource bp, a unit of British oil company BP (BP.L) , opens new tab, has a pipeline of between 1 and 1.5 gigawatts in advanced stages of development, in addition to other less mature projects in Brazil. "This partnership represents a fundamental advance in the company's trajectory towards a just energy transition and adds to the renewable generation projects being implemented by Petrobras," CEO Magda Chambriard said in the statement. The companies added that completion of the transaction is still subject to regulatory approvals. The new joint venture aims to develop profitable renewable energy projects and increase the presence of both firms among the main players in the Brazilian renewable energy sector, they said. https://www.reuters.com/business/energy/petrobras-enters-brazil-solar-energy-segment-deal-4999-lightsource-bp-2025-12-16/

2025-12-16 22:19

FX band adjustment aligns with inflation to reduce peso overvaluation risk Reserve accumulation program aims for predictable, stable FX market Execution of policy changes crucial for Argentina's market access and rating NEW YORK, Dec 16 (Reuters) - Argentina’s central bank announced adjustments to its foreign exchange framework that investors broadly view as a step toward restoring credibility and reopening a path to international capital markets. Analysts say the measures address two long-standing investor concerns: the risk of peso overvaluation and the lack of a transparent, rules-based approach to rebuilding foreign exchange reserves. There is no official number for where net reserves currently sit, but those are widely considered to be in the red. Sign up here. Morgan Stanley’s sovereign strategy team said in a research note that the announcements “partially address key investor concerns” and “increase the probability of achieving market access in external bonds.” Below is a breakdown of what is changing and how the measures support the government’s goal of rebuilding FX buffers and restoring access to international markets, which have long been closed, partly because of the country's pattern of debt defaults. A WIDER BAND Until now, the ceiling of the FX band imposed in April had been crawling at a 1% monthly pace that lagged inflation, leading the currency to strengthen on a relative basis. Morgan Stanley, in the same note, described the shift as “a much awaited adjustment,” noting that starting Jan. 1, 2026, the band will adjust in line with the latest available CPI data. By indexing the band to actual inflation, the central bank reduces the likelihood that spot prices repeatedly push toward the weaker-peso end of the band, an outcome that could force the central bank to sell reserves to defend the currency. For investors, this lowers the perceived risk that policy stress or sharp reserve losses could trigger abrupt changes to the FX framework, a situation which loomed in September as pressure on the peso intensified before the Trump administration rode to the rescue with a $20 billion currency swap line. ACCUMULATION AS POLICY The second pillar of the central bank’s move is the launch of a pre-announced foreign-exchange reserve accumulation program, designed to make reserve building more predictable and less disruptive to markets. JPMorgan describes the initiative as part of an effort to create an “anti-fragile macro setup,” meaning a framework in which reserves rise organically as the economy stabilizes, rather than through one-offs. In practical terms, the central bank is signaling that it will buy dollars in the market only when peso demand is rising and the FX market can absorb those purchases without excessive volatility. Under the central bank's baseline scenario, demand for pesos is expected to recover gradually after years of high inflation and capital controls. The central bank expects the monetary base to increase from about 4.2% of GDP to 4.8% by the end of next year. Analysts at JPMorgan estimated that this could involve roughly $10 billion in net FX purchases without generating inflationary pressure. If confidence and peso demand strengthen further, FX purchases could rise toward $17 billion, still without requiring aggressive liquidity withdrawal or disruptive intervention, they said. The International Monetary Fund said earlier this month that policy support for a stronger accumulation of reserves was needed for Argentina's access to international capital markets. For investors, the key takeaway is that reserve accumulation is no longer a policy choice, but a result of rising money demand within a controlled FX regime. This raises the likelihood that reserve gains prove durable, analysts said. Importantly, the central bank has also specified how it intends to operate in a shallow FX market. JPMorgan highlights that daily purchases will initially be capped at around 5% of daily FX market volume, with scope for block purchases to preserve market stability. The bank also noted that outside repurchase operations, volume had recently dropped from about $600 million to $200 million daily on average, meaning daily purchases would roughly land between $10 to $30 million. There is no obligation embedded to make the purchases, or a target of accumulation. Morgan Stanley called the design “a balancing act between investors’ and the IMF’s demands and the practical limitations in the Argentine FX market,” arguing that the changes bring Argentina closer to the conditions required for a return to international debt issuance without extraordinary support. WHAT NEXT? The test now is execution, both in keeping the currency broadly aligned with fundamentals and translating the framework into sustained reserve accumulation. “We’ll be monitoring if these FX policy changes will be conducive to FX reserve accumulation goals that the authorities have set, as well as to the recovery of international capital market access, to assess whether this could result in (an) uplift in Argentina’s rating,” said Todd Martinez, co-head of the Americas for Fitch Ratings’ sovereigns group. If the new central bank framework works as planned, it should strengthen Argentina’s investment case by reducing currency risks and make reserves more predictable. While execution risks remain, the central bank's moves could represent a meaningful step toward Argentina’s return to international capital markets. https://www.reuters.com/world/americas/argentinas-new-fx-bands-reserves-policy-aim-boost-credibility-2025-12-16/

2025-12-16 22:13

Dec 16 (Reuters) - The European Commission on Tuesday made public proposals that would reverse an effective ban on sales of new internal combustion engine cars from 2035, bowing to pressure from Germany, Italy and major automakers. The proposed package cuts the planned 2035 goal to a 90% reduction in tailpipe emissions compared with 2021, and also introduces measures to accelerate the shift to electric vehicles while giving manufacturers more flexibility. Sign up here. Here are the major reactions to the decision: GERMAN LUXURY CARMAKER BMW (BMWG.DE) , opens new tab "It is an important first step that the EU Commission no longer pursues technology bans as a guiding principle, but recognises the future viability of the combustion engine." STEFFEN KAWOHL, POLICY ADVISOR AT THE GERMAN MITTELSTAND ASSOCIATION (DMB) "Abandoning the ban on combustion engines may slow down the transformation of the automotive industry, but it will not stop it entirely. This slowdown would only make sense if the German economy uses the extra time to advance the transition to fossil-free mobility." FIAT-TO-JEEP MAKER STELLANTIS (STLAM.MI) , opens new tab "The proposals do not meaningfully address the issues that the industry is facing right now. Specifically, the package fails to provide a viable trajectory for the light commercial vehicles segment, which is in a critical situation, and the 2030 flexibilities requested by the industry for passenger cars." DOMINIC PHINN, HEAD OF TRANSPORT AT CLIMATE GROUP "The watering down of the petrol and diesel-engine phase-out flies in the face of leading companies across Europe, who are investing billions in electric fleets and desperately need the stability it provides." GERMAN CARMAKER MERCEDES-BENZ (MBGn.DE) , opens new tab "The EU Commission has taken a step in the right direction towards more flexibility for us as manufacturers and towards the necessary technological neutrality... The EU is thus reacting to the stagnating ramp-up of electric mobility in Europe." CHRIS HERON, SECRETARY GENERAL OF E-MOBILITY EUROPE "By reopening the door to plug-in hybrids and unscalable biofuels, we slow ourselves down in a highly competitive global race. The future of transport is electric; the question is whether Europe builds it or imports it." FRIEDRICH MERZ, GERMAN CHANCELLOR "It is good that the Commission is now opening up regulation in the automotive sector following the clear signal from the German government. Greater openness to technology and more flexibility are right steps to take in order to better align climate targets, market realities, businesses and jobs." JAN DORNOFF, RESEARCH LEAD AT THE INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION (ICCT) "The Automotive Package signals that the European Commission remains committed to car electrification, as the corporate fleets and small affordable electric car initiatives show. But the proposed changes to the CO2 standards are risky concessions that will delay necessary transformations." ANTONIO TAJANI, ITALY'S FOREIGN MINISTER "We have stopped the ban on combustion engines from 2035 ... A choice that protects 70,000 jobs in Italy alone. Yes to protecting the environment, but always safeguarding the dignity of the individual, of those who do business and create jobs." BEN NELMES, CEO OF NGO NEW AUTOMOTIVE "What the battery manufacturing sector needs is clarity and consistency from Europe.. In rewriting these rules, the European Commission is undermining trust in its own regulations and gambling with Europe's economic future." JULIEN THOMAS, TP ICAP MIDCAP ANALYST "In our view, these measures are generally favourable to European manufacturers, particularly those producing high volumes and light commercial vehicles (where regulatory uncertainty has caused sales to fall this year), such as Renault, Volkswagen and Stellantis." FRENCH CARMAKER RENAULT (RENA.PA) , opens new tab "Renault Group welcomes the Commission's adoption of an automotive package that addresses some of the major challenges facing the European industry. "We particularly note the emphasis placed on the need to accelerate the adoption of electric vehicles, both through the introduction of a category of small electric vehicles under 4.2 metres and through a European initiative on the greening of fleets." GERMAN CARMAKER VOLKSWAGEN (VOWG.DE) , opens new tab "The European Commission's pragmatic draft proposal for new CO2 targets is economically sound overall." "The fact that small electric vehicles are to receive special support in future is very positive... Opening up the market to vehicles with combustion engines while compensating for emissions is pragmatic and in line with market conditions." VOLVO CAR (VOLCARb.ST) , opens new tab "Weakening long-term commitments for short-term gain risks undermining Europe’s competitiveness for years to come. A consistent and ambitious policy framework, as well as investments in public infrastructure, is what will deliver real benefits for customers, for the climate, and for Europe’s industrial strength." "Volvo Cars has built a complete EV portfolio in less than ten years and are ready to go full electric with a bridge of long-range hybrids. If we can do it, others can as well." THOMAS PECKRUHN, PRESIDENT OF GERMANY'S ZDK ASSOCIATION FOR MOTOR VEHICLES TRADE "Every day, our businesses experience where European regulation fails: high charging costs, lack of infrastructure and suitability for everyday use by consumers. Climate-neutral mobility only works if it is affordable, practical and reliable for people. Anything else remains theoretical." https://www.reuters.com/sustainability/climate-energy/reactions-european-commission-proposal-reverse-2035-combustion-engine-ban-2025-12-16/