2025-10-27 06:35

Dollar declines as trade optimism boosts stocks Central banks' meetings may influence market direction Yuan boosted by stronger rate fix Oct 27 (Reuters) - The U.S. dollar weakened against the euro, Chinese yuan and Australian dollar on Monday as optimism over a possible U.S.-China trade deal boosted risk appetite and reduced demand for the greenback. Overall moves in the currency markets were relatively muted as traders also waited on several key central bank meetings this week. Sign up here. U.S. President Donald Trump said on Monday the United States and China were set to "come away" with a trade deal. Trump is expected to meet Chinese President Xi Jinping this week in South Korea. "The market's kind of euphoric," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, noting strong gains in global stock markets while gold fell. The markets are cheered by three main developments, Chandler said. "It looks like the U.S. and China moved away from the brink. The U.S. struck foreign trade deals or frameworks with some East Asian countries, and Milei did better in Argentina," Chandler said, referring to the president of the South American country. Argentine President Javier Milei's party cruised to victory in midterm legislative elections as voters handed him a mandate to keep pushing through his overhaul of the economy. The dollar index was last down 0.11% at 98.84, with the euro up 0.15% at $1.1643. Central banks may dominate market direction later this week, with the Federal Reserve and Bank of Canada expected to cut rates on Wednesday, while the European Central Bank and Bank of Japan on Thursday are likely to leave rates unchanged. With a 25-basis-point Fed rate cut long priced in, markets will closely watch for any signs that the central bank may be preparing to wind down its quantitative tightening program. The Chinese yuan was also boosted by the People's Bank of China setting the official yuan midpoint rate higher than expected. Prior to the market open, it set the official yuan midpoint rate at 7.0881 per dollar, the strongest since October 15, 2024, and above a Reuters estimate of 7.1146. Chris Turner, global head of forex research at ING, said in a report that the move may be a gesture of goodwill ahead of Thursday's Trump-Xi meeting, or a sign that China wants to boost its domestic demand. "Either way, a stronger renminbi is normally supportive for global EM (emerging market) currencies and a mild dollar negative," Turner said. The Chinese offshore yuan rose to a more than one-month high against the dollar of 7.1015. The Australian dollar was last up 0.63% versus the greenback at $0.6554. The Australian currency was also boosted by relatively hawkish comments from the country's central bank head. Reserve Bank of Australia Governor Michele Bullock said on Monday a rise in core inflation of 0.9% in the third quarter would be a "material miss" to forecasts that would have to be weighed by the board when judging whether to cut interest rates next week. Traders are also focused on a meeting on Tuesday between Trump and Japan's new Prime Minister Sanae Takaichi, where the two leaders will discuss trade issues. The Japanese currency has weakened in recent weeks on concerns that Takaichi will implement more expansionary fiscal policies. Against the Japanese yen , the dollar was roughly flat on the day at 152.92 yen. Investors are further watching for any indication on when the U.S. federal government will reopen, with the U.S. economy expected to take a bigger hit the longer the shutdown goes on. Air travel turmoil deepened with more than 2,700 flights delayed nationwide on Monday and more than 8,600 delays on Sunday, with air traffic controller absences surging amid a federal government shutdown now in its 27th day. In cryptocurrencies, bitcoin gained 1.82% to $115,454. https://www.reuters.com/world/asia-pacific/dollar-hits-two-week-high-against-yen-trade-talks-fed-meeting-loom-2025-10-27/

2025-10-27 06:15

JPYC becomes first stablecoin backed by yen Japan megabanks to jointly issue stablecoins, Nikkei says BOJ says stablecoins may emerge as key player in global system Yen stablecoins may take years to spread in Japan, academic says TOKYO, Oct 27 (Reuters) - The world's first stablecoin pegged to the yen launched in Japan on Monday, a small but significant move in a country where many consumers still prefer to use traditional payment means like cash and credit cards. JPYC, a Japanese startup, began issuing the stablecoins - also called JPYC - which are fully convertible to the yen and backed by domestic savings and Japanese government bonds (JGBs). Sign up here. The company aims to issue 10 trillion yen ($66 billion) worth of JPYC over three years and have the digital assets used widely overseas. It does not initially plan to charge transaction fees to encourage its usage, and instead aims to earn money from interest on holdings of JGBs. "We hope to spur innovation by giving startups access to low transaction and settlement fees," CEO Noritaka Okabe told a press briefing. "Increasing global interoperability would benefit us too, so we're open to capital tie-ups," he added. Blockchain-based stablecoins are typically pegged to a fiat currency and offer faster and cheaper transactions. With strong backing from U.S. President Donald Trump, stablecoins pegged to the U.S. dollar have surged and now account for over 99% of global stablecoin supply, according to the Bank for International Settlements. Interest in stablecoins is also gaining momentum globally, and Japan's three megabanks will jointly issue stablecoins, the Nikkei daily reported this month. Tomoyuki Shimoda, a former Bank of Japan executive who is currently an academic at Japan's Rikkyo University, said yen stablecoins are not going to have the same momentum as those backed by the U.S. dollar - the world's reserve currency used across the globe. "There's a lot of uncertainty on whether yen stablecoins will become widespread in Japan," he said. "If megabanks join the market, the pace could accelerate. But it could still take at least two to three years." Policymakers have expressed concern that stablecoins could facilitate the movement of funds outside regulated banking systems and potentially undermine the role of commercial banks in global payment flows. "Stablecoins might emerge as a key player in the global payment system, partially replacing the role of bank deposits," BOJ Deputy Governor Ryozo Himino said in a speech last week, urging global regulators to adapt. Elsewhere in Asia, South Korea has pledged to allow companies to introduce won-based stablecoins and China, too, is considering allowing usage of yuan-backed stablecoins. ($1 = 150.7800 yen) https://www.reuters.com/sustainability/boards-policy-regulation/worlds-first-yen-pegged-stablecoin-debuts-japan-2025-10-27/

2025-10-27 05:42

BANGKOK, Oct 27 (Reuters) - Thailand's exports beat forecasts with the fastest growth rate in more than three years in September after a surge in U.S. shipments, prompting the commerce ministry to raise its export forecast for the whole of 2025. Exports THCEX=ECI , opens new tab, a key driver of the Thai economy, rose 19.0% in September from a year earlier, the fastest rate of growth in 42 months, the commerce ministry said on Monday, beating analysts' expectations of a rise of 7.0% and following an annual rise of 5.8% in August. Sign up here. Exports were boosted by clarity on U.S. tariffs, as well as signs of a relaxation in U.S. trade measures compared with earlier periods, which helped improve the global trade environment, the ministry said in a statement. "U.S. tariffs on Thailand have had a relatively limited direct impact, and our entrepreneurs are somewhat prepared," Nantapong Chiralerspong, head of the Trade Policy and Strategy Office, told a press conference. "Compared to other ASEAN countries, our 19% tariff rate remains competitive," he said. In September, exports to the United States, Thailand's largest market, jumped 35.3% from a year earlier, the ministry said. The United States set a 19% tariff on imported goods from Thailand, lower than the 36% rate announced earlier and in line with other countries in the region. Thailand and the United States on Sunday reached a framework agreement on trade, in which Thailand would eliminate tariff barriers on approximately 99% of U.S. goods. In the first nine months of 2025, exports rose 13.9% from a year earlier. The commerce ministry now expects exports to rise between 9.4% and 10.4% this year, much higher than its original target of 2% to 3%. Exports are expected to continue rising in the remaining three months of the year, but at a slower pace, Nantapong said. In September, imports (THCIM=ECI) , opens new tab increased 17.2% from a year earlier, higher than a forecast rise of 10.6%. That led to a trade surplus (THCTR=ECI) , opens new tab of $1.28 billion in September, much higher than the expected $0.1 billion surplus. Rice export volumes fell by 15.6% annually in September and by 23.1% in the January-September period to 5.8 million metric tons. https://www.reuters.com/world/asia-pacific/thai-september-exports-rise-190-yy-much-stronger-than-expected-2025-10-27/

2025-10-27 05:26

Focus on Trump-Xi and central bank meetings, US megacap earnings US-China trade deal framework boosts global stocks US stock indexes register record closing highs Fed expected to cut rates by 25 basis points NEW YORK, Oct 27 (Reuters) - Global stocks rallied on Monday to a fresh intraday record while the dollar eased on optimism that a potential trade deal was on the horizon between China and the U.S., as investors awaited a slew of central bank policy announcements and earnings from several megacap companies. Top Chinese and U.S. economic officials on Sunday hammered out the framework of a trade deal for U.S. President Donald Trump and Chinese counterpart Xi Jinping to decide on at a meeting in South Korea scheduled for Thursday. Sign up here. Trump said he thought a deal would be reached with China and announced a flurry of deals on trade and critical minerals in Malaysia with four Southeast Asian nations during the first stop of a five-day Asia trip. A trade deal would halt heavier U.S. tariffs and Chinese rare earths export controls, helping allay some recent worries among investors about relations between the world's two largest economies. On Wall Street, U.S. stocks showed strong gains, led in part by gains in technology stocks, including a surge of more than 11% in Qualcomm (QCOM.O) , opens new tab shares after it unveiled two artificial intelligence chips for data centers, with commercial availability from next year. "On Friday and over the weekend we heard there's going to be positive things coming out of the Trump and Xi meeting. The market's still up on that," said Scott Wren, senior global market strategist at Wells Fargo Investment Institute in St. Louis, Missouri. "I don't think the market expects some complete deal out of this, but I think they expect some grain sales, some assurance that these rare earth elements are going to continue to be exported by China - just an easing of tensions to some extent." Earnings are expected this week from "Magnificent Seven" heavyweights Microsoft (MSFT.O) , opens new tab, Alphabet (GOOGL.O) , opens new tab, Apple (AAPL.O) , opens new tab, Amazon (AMZN.O) , opens new tab and Meta Platforms (META.O) , opens new tab, and investors will closely eye the results to see if they justify heightened valuations. The Dow Jones Industrial Average (.DJI) , opens new tab rose 337.47 points, or 0.71%, to 47,544.59, the S&P 500 (.SPX) , opens new tab rose 83.47 points, or 1.23%, to 6,875.16 and the Nasdaq Composite (.IXIC) , opens new tab rose 432.59 points, or 1.86%, to 23,637.46 as each of the three main indexes registered record closing levels. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab climbed 11.35 points, or 1.13%, to 1,012.72 after hitting an intraday record of 1,012.90 and was on pace for its third straight session of gains, while the pan-European STOXX 600 (.STOXX) , opens new tab closed up 0.22% at a fresh record. Argentina's Merval index (.MERV) , opens new tab shot up 454,827.09 points, or 21.9%, to 2,531,685.67 while its bonds and currency also surged after President Javier Milei's party won an overwhelming victory in a Sunday midterm election, a key requisite to keep economic reforms on track and a U.S. financial backstop in place. The U.S. dollar weakened against the euro, Chinese yuan and Australian dollar on Monday as optimism over a possible U.S.-China trade deal boosted risk appetite and reduced demand for the greenback. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, shed 0.1% to 98.83, with the euro up 0.16% at $1.1644. The Chinese yuan rose 0.26% against the greenback to 7.108 per dollar. The yuan was also boosted by the People's Bank of China setting the official yuan midpoint rate higher than expected. Prior to the market open, it set the official yuan midpoint rate at 7.0881 per dollar, the strongest since October 15, 2024, and above a Reuters estimate of 7.1146. Against the Japanese yen , the dollar ticked up 0.02% to 152.88 while sterling was up 0.16% to $1.333 against the greenback. Investors will also grapple with major central bank meetings this week including those of Japan, Canada, Europe and the United States. The Federal Reserve is widely anticipated to cut interest rates by 25 basis points after data showed U.S. consumer prices increased slightly less than expected in September, but the government shutdown and its impact on data remain a concern. Market expectations for a rate cut of 25 basis points stand at 97.8%, according to CME's FedWatch Tool. , opens new tab The European Central Bank and the Bank of Japan are both broadly expected to hold rates steady later this week. The BOJ is likely to debate whether conditions are right to resume rate hikes as worries about a tariff-induced recession ease, but political complications may keep it on hold for now. Japan's new finance minister, Satsuki Katayama, said her meeting with U.S. Treasury Secretary Scott Bessent did not directly touch upon the Bank of Japan's monetary policy. In Treasuries, the yield on benchmark U.S. 10-year notes slipped 0.8 basis point to 3.989%, from 3.997% late on Friday. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-10-27/

2025-10-27 05:19

MUMBAI, Oct 27(Reuters) - The Indian rupee logged its worst day in a month on Monday as a drop below the 88 per U.S. dollar mark spurred a flight out of long wagers on the currency, while persistent dollar demand from importers also weighed. The rupee closed at 88.2450 against the U.S. dollar, down 0.4% on the day, marking its steepest one-day fall since September 23. Sign up here. Frequent interventions by the Reserve Bank of India had helped the rupee hold above the 88 mark last week, but traders also pointed to an easing of that defence on Monday. While state-run banks were spotted offering dollars on the day, the activity was not clustered around any specific level, a trader at a foreign bank said. There was "lots of short covering (on USD/INR) after it rose past 88," which prompted the sharp move, the trader added. Another trader at a state-run bank, meanwhile, pointed to dollar demand from importers, including local oil companies. Despite the day's fall, the rupee has outperformed most of its regional peers in October after heavy intervention by the central bank earlier in the month helped shore it up from the brink of its all-time low. Analysts at BofA Global Research hold a neutral view on the rupee. Trade uncertainty, including around services, weighs on exports and flows, despite the appealing valuation and weaker USD trend in the final quarter of 2025, they said in a note. The rupee's 40-currency real effective exchange rate (REER), a gauge of its competitiveness, fell to 97.65 in September, the lowest in 7 years. A REER below 100 points to undervaluation. Elsewhere, the dollar index was steady at 98.8 while the offshore Chinese yuan rose to a one-month peak on signs of progress in trade talks between the U.S. and China. Meanwhile as far as India-U.S. talks go, a senior Indian government official said last week a bilateral trade deal with Washington was "very near." https://www.reuters.com/world/india/rupee-may-extend-rbi-spurred-rally-fresh-boost-softer-us-inflation-2025-10-27/

2025-10-27 05:10

U.S. and China set to come away with a trade deal, Trump says Risk appetite rises on easing trade tensions, analyst says Focus on U.S. Fed policy statement on Wednesday Oct 27 (Reuters) - Gold prices fell 2% on Monday, as hopes of easing U.S.-China trade tensions lifted risk appetite for equities, while investors awaited major central bank meetings this week for rate cut cues. Spot gold was down 2% at $4,029.69 per ounce as of 1122 GMT. Prices hit a record high of $4,381.21 on October 20, buoyed by rising bets for U.S. rate cuts, and geopolitical and economic uncertainties, but have since fallen more than 5%. Sign up here. U.S. gold futures for December delivery lost 2.3% to $4,042.80. Asian stocks surged as signs of a detente in China-U.S. trade tensions buoyed risk appetite in a strong start to a week that will be headlined by central bank meetings and megacap earnings. "A possible trade deal between the U.S. and China is supporting risky assets and weighing on gold, but we should also remember that potentially lower tariffs will allow the Federal Reserve to cut rates further," UBS analyst Giovanni Staunovo said. The U.S. and China are set to "come away with" a trade deal, U.S. President Donald Trump said, a day after top officials of the two countries hashed out a framework for Trump and Chinese President Xi Jinping to decide on during their upcoming meeting in South Korea. Meanwhile, the Fed is expected to cut rates by a quarter percentage point on Wednesday, a view supported by softer-than-expected September inflation. With a 25-basis-point cut already priced in, markets are looking ahead to any forward-looking remarks from Fed Chair Jerome Powell at the meeting. "Lower real interest rates should still support demand for gold. The market consensus is looking for the Fed to cut rates by 25 basis points, so I don't expect much movement around the FOMC meeting," Staunovo added. Non-yielding gold tends to benefit in a low-interest-rate environment. Elsewhere, spot silver fell 2.3% to $47.48 per ounce, platinum eased 0.8% to $1,593.43 and palladium lost 0.8% to $1,417.58. https://www.reuters.com/world/china/gold-dips-stronger-dollar-us-china-trade-deal-hopes-2025-10-27/