2025-10-15 06:24

US officials blast China as trade tensions continue Dollar weakens against yen and Swiss franc Dollar index on track for second straight session of losses New Zealand dollar, Aussie strengthen NEW YORK, Oct 15 (Reuters) - The U.S. dollar fell against the euro and yen on Wednesday with market sentiment weakened by the continuing trade tensions between the U.S. and China. Traders analyzed comments from Federal Reserve Chair Jerome Powell for cues on upcoming rate cuts amid a U.S. government shutdown, which has hampered the timely release of key data. Sign up here. The dollar weakened 0.39% to 151.24 against the Japanese yen and was down 0.49% to 0.797 against the Swiss franc , on track for the second straight session of losses against both safe-haven currencies. Top U.S. officials, including Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, blasted China's major expansion of rare earths export controls as a threat to global supply chains. Greer described China's , opens new tab export controls as a complete repudiation of U.S.-Chinese trade agreements over the past six months although he and Bessent stressed that Washington did not want to escalate the conflict. President Donald Trump had threatened to impose tariffs on China last week in retaliation. The Chinese commerce ministry defended the rare-earths controls, pointing to a series of U.S. measures on Chinese goods and companies and calling it hypocritical. "The market is showing an impressive ability to shrug off trade-related headlines and there's a firm belief that the U.S. and China will find a way to move forward and will make an agreement," said Adam Button, chief currency analyst at ForexLive. "The headlines continued to be inflammatory, including today from Bessent and Greer. But the market saw how Trump quickly de-escalated over the weekend and doesn't yet believe he wants a real fight." The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.32% to 98.72, on track for the second consecutive session of losses. The Fed's Beige Book showed that U.S. economic activity was little changed and employment was largely stable in recent weeks, although there were emerging signs of weakness including more layoffs and middle- and lower-income households pulling back on spending. Powell, in a speech on Tuesday, left the door open to rate cuts by saying the U.S. labor market remained mired in low-hiring, low-firing doldrums. He said the absence of official economic data due to the government shutdown has not prevented policymakers from being able to assess the economic outlook, at least for now. Markets are currently priced for a quarter-point cut at the October 28-29 Fed gathering and another at the following meeting in December, followed by three more cuts next year, according to LSEG data. The yield on benchmark U.S. 10-year notes fell 1.6 basis points to 4.038%. Wall Street stocks finished mostly higher as companies continued to report strong results as the quarterly earnings season kicked off. The Dow Jones Industrial Average (.DJI) , opens new tab fell 0.04%, the S&P 500 (.SPX) , opens new tab rose 0.40% and the Nasdaq Composite (.IXIC) , opens new tab rose 0.66%. The euro rose 0.35% to $1.1646 after gaining 0.3% in the previous session, supported by the French government's proposal to suspend landmark pension reforms. "Even if the French political upheaval has started to moderate, outright bullish catalysts are lacking for the euro at this stage," TS Lombard analysts led by Daniel von Ahlen wrote in an investor note. "Meanwhile, the recent performance of the EUR/USD is now on par with the past rallies following maor policy announcements in the euro area, which adds to our tactical caution on the common currency." The New Zealand dollar edged up only 0.1% to $0.5721, after dipping to a six-month low of $0.56839 on Tuesday. The Aussie climbed 0.39% to $0.651, after falling 0.5% a day earlier, when it touched the lowest since August 22 at $0.64405. https://www.reuters.com/world/china/dollar-under-pressure-fed-rate-cut-bets-china-trade-tensions-2025-10-15/

2025-10-15 06:15

JAKARTA, Oct 15 (Reuters) - Indonesia's Mount Lewotobi Laki-laki erupted on Wednesday, shooting volcanic ash 10 km (6.2 miles) into the sky, the country's volcanology agency said, forcing authorities to raise the alert system to its highest level. Located in East Nusa Tenggara province, the volcano erupted on Wednesday at 1:35 a.m. (1835 GMT Tuesday) for around nine minutes, the country's Geological Agency said in a statement. Sign up here. It erupted again on Wednesday morning at 9:21 a.m. (0121 GMT), spewing ash 8 km high, the agency said, for about three minutes. Late on Tuesday, the agency raised its alert level to the highest point after recording "significant rising of the volcano's activities" since Monday, its head, Muhammad Wafid, said. "People living near the volcano should be aware of the potential volcanic mudflow if heavy rain occurs," Wafid said, adding that people should clear a six- to seven-kilometre area around the site. Dozens of people living in villages nearest to the volcano were evacuated after the eruptions, according to Avelina Manggota Hallan, an official at the local disaster mitigation agency. Most of the residents left their villages after Lewotobi Laki-laki's major eruption, which killed 10 people and damaged thousands of houses in November 2024, Hallan added. The government has closed Fransiskus Xaverius Seda airport, located in Maumere, East Nusa Tenggara province, until Thursday, the airport operator said in a post on social media. The volcano last erupted in August. It also erupted in July, causing flight disruptions to and from the nearby resort island of Bali. The Wednesday's eruptions so far have not affected flights to and from Bali, Bali's airport operator told Reuters. Indonesia, which has more than 120 active volcanoes, sits on the Pacific "Ring of Fire," an area of high seismic activity that is atop multiple tectonic plates. https://www.reuters.com/business/environment/indonesias-mount-lewotobi-laki-laki-erupts-spewing-ash-10-km-into-sky-2025-10-15/

2025-10-15 06:04

Italy has retained gold despite crises, mounting debt Bank of Italy holds 2,452 tons, World Gold Council says Country has world's third largest national bullion reserves Italy's ties to gold rooted in history ROME, Oct 15 (Reuters) - Italy, whose sovereign assets from bonds to banks have so often been the subject of market crises in recent years, is currently enjoying a windfall as the central bank's vast gold reserves track record-high prices. The country's bullion stockpile reflects decades of determined safeguarding after it rebuilt reserves plundered by the Nazis in the 1940s, and a stance that has seen it resist calls to sell through repeated crises and as its national debt soared. Sign up here. The Bank of Italy now sits on the world's third-largest national gold stockpile, behind only the U.S. and Germany. Its 2,452 metric tons of gold are worth an estimated $300 billion at current prices, roughly 13% of 2024 national output, Reuters calculations show. WARTIME SEIZURES SHAPE PEACETIME POLICY Italy's love affair with bullion goes back millennia, with the Etruscans mastering the technique of fusing gold beads well before ancient Rome. Under Julius Caesar, the aureus gold coin became the monetary cornerstone of the Roman Empire, and centuries later, the fiorino became as influential in medieval Europe as the dollar is today. The country's more recent gold policy was shaped by its wartime experience, when Nazi forces aided by Italy's own fascist regime seized 120 tons of its reserves. By the war's end, these had dwindled to around 20 tons. During its postwar "economic miracle", Italy became an export-driven economy and saw a surge in foreign currency inflows, notably U.S. dollars. Some of these, according to the Bank of Italy's website, were converted into gold. Its holdings had climbed to 1,400 tons by 1960, including three-quarters of the seized bullion which it was able to recover in 1958. THE FAMILY SILVERWARE The oil shocks of the 1970s ushered in further global uncertainty, which in Italy meant social unrest and frequent government changes seen as risky by investors. "The extreme monetary instability led the central banks of Western countries to buy gold, the ultimate symbol of financial solidity," Stefano Caselli, dean of the SDA Bocconi School of Management in Milan, told Reuters. To offset budget holes left by capital flight, Rome used 41,300 ingots from its gold reserves as collateral for a $2 billion loan from Germany's Bundesbank in 1976. But unlike Britain or Spain, Italy has refused to sell off gold during financial downturns, retaining its reserves even through the 2008 debt crisis. "Gold is like the family silverware, it's like grandpa's precious watch, it's the last resort in times of crisis, any crisis that undermines international confidence in the country," Salvatore Rossi, former deputy governor of the Bank of Italy, wrote in his 2018 book 'Oro' (Gold). DECISION FOR A MODERN ERA With gold still viewed as a safeguard of last resort by many Western nations, central banks worldwide are again stockpiling amid a reshaping of the global order. "That historical decision of the Bank of Italy feels strikingly modern," said Caselli. "Because we are back there again." The Bank of Italy currently holds approximately 871,713 gold coins weighing some 4.1 tons in its vaults, dubbed the 'sacristy' after the room in a church where sacred items are kept. Gold accounted for nearly 75% of Italy's official reserves at the end of last year, a significantly higher ratio than the 66.5% of the euro zone, according to World Gold Council data. Around 1,100 tons are stored in the vault beneath the Bank of Italy's headquarters at Palazzo Koch, a short walk from the Colosseum. A similar portion is held in the U.S., while smaller amounts are kept in Britain and Switzerland. Italy also remains one of the world's top exporters of gold jewellery, with production concentrated in Alessandria, Arezzo, and Vicenza. Luxury brands like Bulgari, Buccellati and Damiani enjoy global acclaim. THE HOTTEST ASSET Calls to sell gold to reduce Italy's public debt, now over 3 trillion euros ($3.49 trillion) and seen at 137.4% of GDP next year, continue to surface but have not yet succeeded. "Selling even half of the gold holding would not solve Italy's debt problem anyway," said Giacomo Chiorino, head of market analysis at Banca Patrimoni Sella & C. Some argue that selling ingots could unlock funding for essential public services to benefit citizens instead of sitting idly in vaults. Nonetheless, the Bank of Italy shows no intention of selling. It had no comment on its gold policy for this article. "At a time when the world is being redrawn, market prices have reached unprecedented multiples and (digital assets such as) stablecoins and cryptocurrency are gaining ground, central banks currently hold the hottest asset," Bocconi's Caselli said. "They are right not to sell." ($1 = 0.8607 euros) https://www.reuters.com/business/finance/italys-tenacious-stance-gold-pays-off-prices-soar-2025-10-15/

2025-10-15 05:53

MUMBAI, Oct 15 (Reuters) - The Indian rupee soared to post its best one-day gain in nearly four months on Wednesday, powered by firm central bank intervention supporting the currency while traders also cited unwinding of bearish wagers on the currency. The rupee closed at 88.0750 against the U.S. dollar, up 0.8% on the day, its strongest performance since June 25. Sign up here. The local unit had touched a peak of 87.9250 in early trading after the Reserve Bank of India stepped in forcefully to curb pressure on the rupee across both the local spot and non-deliverable forwards market, traders said. Worries over the drag from steep U.S. trade tariffs, patchy foreign portfolio flows and a surge in precious metal prices had pinned the rupee close to its all-time low of 88.80 over the last two weeks but traders reckon that the pressure could ease following the central bank's intervention. "The market was a bit unfair in testing the central bank's patience at these levels because nothing in the underlying balance of payments had changed to warrant this kind of weakening so far," said Dhiraj Nim, an economist and FX strategist at ANZ. The rupee had declined 2.8% over the year so far while India's balance of payments position stood at a surplus of $4.5 billion in the April-June quarter, compared with a surplus of $5.2 billion a year earlier. Meanwhile, data released on Wednesday showed that India's merchandise trade deficit widened to an 11-month high of $32.15 billion in September, higher than economists' forecast of $25.13 billion in a Reuters poll. India's trade negotiation team is currently in Washington and to hold talks with U.S. officials, a senior trade official said on Wednesday. Elsewhere, the dollar index was down 0.2% at 98.8 after comments from Federal Reserve Chair Jerome Powell bolstered bets on a series of rate cuts in coming months. https://www.reuters.com/world/india/rupee-ride-relief-wave-dovish-powell-cooling-dollar-heat-2025-10-15/

2025-10-15 05:17

Lack of US data a concern abroad as well as in US Shutdown seen as symptomatic of larger issues World Bank, IMF cite loss of institutional trust as a downside risk TOKYO/WASHINGTON, Oct 15 (Reuters) - The U.S. government shutdown that has turned off the official flow of data could begin clouding the view for policymakers in Japan and other countries where insight into the fortunes of the world's biggest economy informs the outlook for their own currencies, trade performance and inflation. What happens in America, in other words, doesn't stay in America, and global officials say being left data-blind by the shutdown over time could complicate their own policymaking and boost the risk of a mistake at a moment when countries are already adjusting to the Trump administration's efforts to remake global trade. Sign up here. "It's a serious problem. We hope this gets fixed soon," Bank of Japan Governor Kazuo Ueda told a news briefing on October 3, as he discussed the hurdles the BOJ faces in deciding when to resume interest rate hikes. One Japanese policymaker went further. "It's a joke. (Federal Reserve Chair Jerome) Powell keeps on saying the Fed's policy is data-dependent but there's no data to depend upon," said the official, who declined to be named as he was not authorized to speak publicly. Bank of England policy member Catherine Mann said the questions surrounding U.S. data, the controversy over the Fed's independence, and other issues don’t figure as directly into BOE policy debate as the shifts in trade policy, for example, which directly affect things like prices and the export outlook. But she noted how over time the British pound lost its central status in the world, a process that took decades and was driven by multiple forces she referred to as “termites” that weakened the pound’s role over time. Policy changes that could degrade the dollar's standing or erode the Fed's independence, “are things that we have in our mind but they’re not front and center,” Mann said. But “they are the termites, as opposed to something that is imminent.” Finance and economic leaders from around the world are gathered in Washington this week for meetings of the World Bank and the International Monetary Fund, and - in a world beset by an ongoing European land war, tensions and violence in the Middle East, and long-term issues like climate change - much of the meeting's oxygen is likely to be consumed by discussion of U.S. President Donald Trump's plans for the world, his performance in office so far, and, now, the sudden stop of official information about a $30 trillion economy that accounts for roughly one-fourth of world output. The shutdown could end at any time and the flow of data resume. But the episode is nonetheless symptomatic of a deeper set of issues around U.S. governance and data reliability, including Trump's efforts to gain new influence over the Federal Reserve and his firing of the head of the Bureau of Labor Statistics because he was angry over a jobs report that the IMF cited among the "downside risks" facing the world right now. "Intensification of political pressure on policy institutions...could erode hard-won public confidence in their ability to fulfill their mandates," the World Economic Outlook published Tuesday by the IMF stated. "Pressures on technocratic institutions mandated with data collection and dissemination could also erode the public’s and markets’ trust in statistics from official sources, significantly complicating the tasks of central banks and policymakers in making policy decisions...It also raises the likelihood of policy mistakes if political interference leads to compromise in data quality, reliability, and timeliness." 'THE RISK OF ERROR RISES' It is not as if all data has disappeared. The U.S. Federal Reserve, self-funded and not affected by the shutdown, continues to survey its extensive network of contacts about the economy, and private data services provide alternatives that policymakers have learned to knit into serviceable, if imperfect, substitutes at least for short-term analysis. “The month-to-month data flow in the U.S. gets talked about but never is a decisive factor," for other central banks, said Adam Posen, president of the Peterson Institute for International Economics and a former Bank of England policymaker. But Posen said that the shutdown itself and the tumult around BLS "contributes to the general skepticism about the governance of the U.S. and the reliability of the U.S....And that is important. It eventually feeds into reserve management and currency decisions and feeds into volatility outlooks for the U.S. that were not there before." If the spring IMF and World Bank meetings were all about the uncertainty posed by Trump's plans for higher tariffs and rising protectionism, attention is now fixed on how companies, countries and consumers are coping with the new landscape. Short answer: Not as bad as expected when Trump first took office, at least through September, but still adjusting, according to the IMF's WEO update that found "a significant, though not massive, impact of shifting policies on the economic outlook." After trimming its global growth outlook by a half percentage point in April to 2.8%, the IMF in its latest projection published on Tuesday clawed most of that back, with global growth now seen at 3.2% for the year. But now, with a major hole in the flow of data covering around a quarter of global economic output, the view will get foggier the longer the shutdown lasts. "Certainly, there is still a great deal of information out there, and policymakers are dedicating substantial effort to gather micro data and anecdotal evidence," about the U.S. said Robert Kahn, director of global macro at Eurasia Group. "But how best to put it together, and importantly how markets will react to such news, are critical unknowns. As time goes on, the risk of error rises as uncertainties compound.” https://www.reuters.com/world/asia-pacific/data-darkness-us-spreads-global-shadow-2025-10-15/

2025-10-15 05:12

LITTLETON, Colorado, Oct 15 (Reuters) - The abrupt cuts to U.S. federal clean energy incentives alongside fresh support for coal and gas-fired power will trigger a swell in North America's emissions in the coming decades as the U.S. generation mix remains fossil fuel reliant. Indeed, consultancy DNV projects that North America's power emissions from 2025 to 2050 will be 3 billion metric tons more than was projected in 2022, when the previous U.S. administration rolled out aggressive clean power goals. Sign up here. The higher pollution totals reflect a combination of slower growth in U.S. clean power generation - now stifled by the planned phase-out of tax breaks - and the extended use of coal and gas-fired power plants planned by the Trump administration. Expanded use of fossil fuels, however, will result in a faster climb in total power generation from now through 2040 compared to 2022's projections, which contained a steep drop-off in estimated coal-fired output over the coming years. COAL'S LONGER LIFE North American power generation by fossil fuel power sources from 2025 to 2050 will grow by around 8% compared to DNV's 2022 estimates, due mainly to the Trump administration's stated expansions to coal and gas-fired power. Coal-fired power generation from now through 2050 is projected to be 46% more than was estimated by DNV in 2022, following the Trump administration's new policies that will extend the life of U.S. coal power plants by several years. North American gas-fired generation through 2050 will grow by around 5% from DNV's 2022 estimate, due in large part to expectations that new gas capacity will be developed over the coming decade in response to gas-friendly policies in the U.S. WIND WOES Generation from clean power sources during 2025 to 2050 will decline by around 3% from 2022's estimates, again due to U.S. policy changes that have resulted in sharp drops to federal incentives for clean power deployment. Total power generation from wind farms in North America is estimated to fall by around 24% from DNV's 2022 estimate, following the aggressive slashing of U.S. federal support for wind development since President Trump returned to office. Power generation from solar photovoltaic installations is also expected to shrink compared to 2022's estimates due to the Trump policy u-turn, although only by 5%. Steady declines in solar system costs, coupled with the fact that solar systems remain the fastest source of new electricity for grid managers, are expected to keep solar capacity growth relatively firm despite the policy shifts. Continued federal support for battery systems going forward is expected to result in a 71% surge in generation from solar-plus-storage systems compared to DNV's 2022 estimates. Sharply lower battery costs compared to 2022 are another factor driving expected solar-plus-storage uptake compared to 2022. EMISSIONS IMPACT In its 2022 outlook for global energy generation and emissions, DNV estimated that North America's power emissions after carbon capture sequestration and storage were likely to steadily decline from around 1.2 billion tons of CO2 a year in the 2020s to around 360 million tons a year by the 2040s. In its 2025 report, however, those emissions estimates veer higher for the next decade or so due to the extension of coal use within the United States, and average around 100 million tons of CO2 more than the 2022 emissions estimates. Emissions from coal-fired generation had been projected to average around 310 million tons of CO2 a year through 2035 in the DNV 2022 report. In this year's report, coal-fired emissions are seen averaging around 470 million tons a year through 2035, which marks a more than a 50% increase. Between 2025 and 2050, that sustained higher level of coal-fired generation is expected to result in 2.6 billion tons of CO2 more than was projected in 2022, and around 3.2 billion tons more of total power sector emissions. To justify the extended use of coal plants, the Trump administration has argued that rapidly rising electricity demand from data centres and other businesses could result in potential power shortages unless output from fossil fuel plants increased. And it is clear from DNV's generation projections that total power output in North America will rise faster through 2040 under the current administration's policy scenario than under the policies that governed DNV's projections in 2022. A major takeaway, however, is that the higher generation peak comes with a sharp rise in power emissions that could be avoided if a cleaner power mix was deployed instead. The opinions expressed here are those of the author, a columnist for Reuters. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn , opens new tab and X , opens new tab. https://www.reuters.com/business/energy/us-clean-power-reversal-comes-with-hefty-emissions-price-tag-2025-10-15/