2026-01-29 03:37

MUMBAI, Jan 29 (Reuters) - The Indian central bank likely sold dollars before the local spot market opened on Thursday to support the rupee, three traders said, after the non-deliverable forward markets signalled a potential break past the 92-per-dollar level. The 1-month NDF had indicted that rupee will weaken past 92 at the open versus the dollar. The currency was quoting at 91.9825 at 09.01 am IST. Sign up here. https://www.reuters.com/world/india/indias-rbi-likely-sold-dollars-ahead-open-support-rupee-traders-say-2026-01-29/

2026-01-29 02:58

MUMBAI, Jan 29 (Reuters) - The Indian rupee hit a record low against the dollar on Thursday, pressured by dollar demand linked to the maturity of non‑deliverable forward positions and corporate hedging, while the central bank likely intervened to hold it above the psychologically significant 92 level. The rupee ended the session at 91.9550 per dollar, down 0.2% from its previous close. Earlier in the session, it fell to 91.9850. Sign up here. Weakness in the currency also spilled over to Indian government bonds, reinforcing a dilemma for the market wherein the Reserve Bank of India's efforts to shore up banking system liquidity get blunted by its FX market interventions. The central bank intervened on Thursday as well to cap the rupee's fall, traders said. Expectations of the rupee depreciating further are also compounding the strain on India's interest rate swaps market, which has contributed to pushing up overnight index swap rates to levels that price in monetary tightening, even though macro-economic indicators signal no need for it. The rupee's weakness also stands in contrast with India's strong economic growth numbers. The economy is expected to grow between 6.8%-7.2% in the fiscal year starting April, a modest slowdown from the 7.4% projection for the ongoing fiscal, the government's annual economic survey said. "The rupee’s valuation does not accurately reflect India’s stellar economic fundamentals," it said, while also noting that the currency's fall helps offset some impact of the steep U.S. tariffs. A trade deal with the U.S. is key to improving sentiment on Indian markets, a portfolio manager at a hedge fund said. "It becomes complicated to project long-term growth for India when the country finds itself in a complicated geopolitical spot," they added, referring to the reticence among foreign investors towards buying Indian assets. Foreign investors have net sold over $4 billion of local stocks in January so far, adding to the record $19 billion outflow in 2025. DBS Bank India expects the rupee to fall to 93-94 this year as capital inflows dwindle. https://www.reuters.com/world/india/rupee-stares-new-low-beyond-92-offshore-led-dollar-rush-weak-asia-2026-01-29/

2026-01-29 02:39

SYDNEY, Jan 29 (Reuters) - The Australian dollar scaled a new three-year peak on Thursday as gold prices surged to yet another record and bets grew for an imminent rate hike at home, helping also lift its kiwi cousin to a seven-month top. Overnight, the U.S. dollar got some respite from a selloff as Treasury Secretary Scott Bessent said Washington has a strong-dollar policy, after President Donald Trump brushed off the recent slide in the currency. Sign up here. A slightly hawkish Federal Reserve that held rates steady, citing a "solid" economy also helped the greenback as markets pushed out the expected timing for the next rate cut to June after Chair Jerome Powell's term ends in May. Still, the two Antipodans outperformed. The Aussie hit an intraday high of $0.7050, after rising 0.4% overnight for its eighth straight session of gains. Prices for gold, a major Australian export, hit a new peak of nearly $5,600 an ounce on Thursday. The Aussie was down 0.2% at $0.7025 in Asian trade as investor sentiment in share markets turned after mixed earnings from the U.S. tech giants. All of the Big Four Australian banks now expect a quarter-point rate hike from the Reserve Bank of Australia next Tuesday, after inflation surprised on the high side last quarter. Goldman Sachs and Deutsche Bank are among the few that are still calling for a hold. "We do not view +0.9% qoq increase in trimmed mean inflation as a large enough upside surprise to the RBA’s forecast to warrant monetary policy shifting from an easing bias to an actual rate hike in just three months," said Andrew Boak, chief economist at Goldman Sachs. "We view February’s decision as a very close call and note several recent precedents where the RBA has been prepared to surprise market expectations." If RBA does hike next Tuesday, it would be the first non-Japan G10 central bank to raise rates in the current global easing cycle. Across the Tasman Sea, the New Zealand dollar also eased 0.2% to $0.6050, having hit a seven-month peak of $0.6070 earlier in the session. Resistance is near $0.6060 and $0.6120. The Reserve Bank of New Zealand next meets on February 18 and is considered certain to hold rates at 2.25%, though investors believe the next move will be up, but not until the second half of the year. https://www.reuters.com/business/australian-dollar-hits-fresh-3-year-peak-kiwi-rises-7-month-top-2026-01-29/

2026-01-29 00:42

Greer, Ebrard discuss stronger rules of origin for trade pact US, Mexico, Canada face July 1 review to decide future of USMCA Canada's role in talks unclear as US-Canada relations sour WASHINGTON, Jan 28 (Reuters) - U.S. Trade Representative Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard agreed on Wednesday to begin formal discussions on possible reforms to the United States-Mexico-Canada trade agreement, Greer's office said. Possible reforms for the USMCA Joint Review include stronger rules of origin for industrial goods, more collaboration on critical minerals, increasing efforts to defend workers and producers, and U.S.-Mexican efforts to combat "the relentless dumping of manufactured goods in our region," the USTR's office said in a statement. Sign up here. USTR gave no details on timing for the talks and its statement did not say whether Canada would be involved. A USTR spokesperson did not immediately respond to a request for clarification. Under the trilateral trade deal that took effect in 2020, the U.S., Mexico and Canada must launch a joint review of the trade pact by July 1, its sixth anniversary, to confirm their intention to renew it for a 16-year period or make modifications, in what USTR has described as a "sunset clause." Greer told lawmakers , opens new tab in December the USMCA's "shortcomings are such that a rubberstamp of the agreement is not in the national interest" of the U.S. He has said the pact is not equipped to deal with surges of exports and investment from non-market economies such as China into the region. U.S. President Donald Trump has been more blunt, saying this month that the trilateral trade pact was "irrelevant" for the U.S. despite a highly integrated North American economy. After Wednesday's meeting, Ebrard called the discussion positive in a social media video, and said the two sides talked about next steps for the USMCA and covered new U.S. tariffs, including those affecting Mexico's auto exports to the U.S. "This year it has to be reviewed, as you know," Ebrard said of USMCA. "We have already moved forward on many issues so that the review goes as quickly and as well as possible." USMCA has shielded Mexico from the bulk of President Trump's tariffs, as goods that comply with its rules of origin can enter the U.S. duty-free. Mexico's Economy Ministry on Wednesday reported that the country's exports reached a record high of nearly $665 billion in 2025, growing 7.6% from the previous year, citing data from the national statistics institute. The United States accounted for 83% of the exports, followed by Canada at 3%, China at 2%, Germany at 1% and South Korea at 1%, according to the report. THREATS TO CANADA U.S. trade relations with Canada have worsened over the past week with President Trump last weekend threatening to slap 100% duties on Canadian goods if Ottawa proceeds with a limited trade deal with China that is expected to allow imports of up to 49,000 Chinese-made electric vehicles. U.S.-Canada trade relations had already soured even before Canadian Prime Minister Mark Carney made a speech at the World Economic Forum that angered Trump. Carney on Wednesday in comments to lawmakers denied that he has retreated from his speech in Davos, Switzerland, in which he urged nations to accept the end of the rules-based global order that Washington had once championed. This drew criticism from U.S. Treasury Secretary Scott Bessent, who cautioned Carney against picking a fight with the U.S. as the USMCA review approaches. Bessent said on CNBC television that Carney "rose to power on an anti-American, anti-Trump message, and that's not a great place to be when you're negotiating with an economy that is multiples larger than you are and your biggest trading partner." https://www.reuters.com/business/autos-transportation/us-mexico-agree-begin-talks-usmca-reforms-ustrs-office-says-2026-01-28/

2026-01-29 00:30

ORLANDO, Florida, Jan 28 (Reuters) - If the "Sell America" trade heats up, who is most likely to stoke the flames? The world's exposure to U.S. assets is approaching $69 trillion, or $27 trillion net of Americans' foreign holdings, so there's no shortage of potential sellers should investors decide to "de-risk" from the United States. Sign up here. The tumultuous first few weeks of the year provide a lengthening list ‌of reasons why they might want to trim that record net "long" position. Chief among them are unease over Washington's disdain for the rules-based global order, its dismantling of relations with close allies like Europe and Canada, and its repeated threats to slap punitive tariffs on its trading partners. Of course, many of America's traditional allies are the biggest lenders to Uncle Sam, via their Treasury bond purchases. They're also the biggest investors in America Inc, amid the frenzy to take part in the U.S. tech and artificial intelligence equity bonanza. BIG HOLDINGS, SMALL EXPOSURE Foreign investors have roughly doubled their allocations ‌to U.S. stocks and bonds in the last decade, led by particularly strong equity inflows, according to a Goldman Sachs report into cross-border asset holdings and exposures published in October. So who would be most likely to reduce these purchases moving forward, or even bring some of that money home? Japan is the obvious candidate. It's the third-largest foreign holder of U.S. stocks and largest holder of U.S. bonds in nominal terms. Japan's public and private sectors are sitting on around $1 trillion of equities ‍and over $1.5 trillion of debt. But Japanese investors' home bias is very strong, and their share of U.S. assets relative to their total holdings is modest. From a diversification perspective, the incentive to rebalance is pretty limited. The Goldman report found that U.S. stocks make up only 19% of Japan's total equity holdings, and U.S. bonds are only 14% of their total debt investments. U.S. bonds also account for 14% ⁠of euro zone investors' debt portfolios, but these purchases have been ramping up in recent years. European investors have almost doubled their exposure to U.S. Treasuries since the COVID-19 pandemic, ‍and now hold around $2 trillion in total, according to Deutsche Bank. Souring U.S.-European relations could slow that buying or even reverse it. SMALL COUNTRIES, BIG EXPOSURE Ultimately, it's smaller countries or "middle powers" that appear ‌most likely ‌to rebalance away from American assets, based on the size of their U.S. securities holdings relative to their overall assets. Norway, Canada and Denmark - which Treasury Secretary Scott Bessent recently disparaged as "irrelevant" – have the highest exposure to U.S. equities on a percentage basis, while Switzerland and, once again, Norway, have the biggest slices of their debt investments in U.S. assets. One potential barrier to rebalancing international portfolios right now, however, is the exchange rate impact. The dollar has slumped to multi-year lows against the euro, sterling and a broad basket of currencies. Repatriation ⁠risks turning dollar selling into a destabilizing rout ⁠that nobody wants. It could also supercharge already strong currencies, posing significant headaches for policymakers around the world. Switzerland springs to mind, with the safe-haven franc soaring to an 11-year high on Tuesday. Could negative interest rates be back on the table? But given the sheer size of the world's net long U.S. position, some reduction of this exposure seems inevitable, whether through passive rebalancing or outright selling – especially if Big Tech's earnings and guidance ‍in the coming quarters fail to allay AI bubble fears. Goldman's analysts say U.S. stocks need to outperform non-U.S. markets by 4-5% this year to justify their historically high weighting in global portfolios. That didn't happen last year, and relative valuations suggest it may not occur this year either. Diversification is almost always an attractive option, and that is now particularly true for countries overexposed to Uncle Sam. (The opinions expressed here are those of the author, a columnist for Reuters) Enjoying this column? Check out Reuters Open Interest (ROI), , opens new tab your essential new source ‍for global financial commentary. Follow ROI on LinkedIn, , opens new tab and X. , opens new tab And listen to the Morning Bid daily podcast on Apple , opens new tab, Spotify , opens new tab, or the Reuters app , opens new tab. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week. https://www.reuters.com/markets/us/global-markets-flows-roi-column-pix-graphics-2026-01-28/

2026-01-28 23:44

Trump officials told industry price floors gone, sources say Industry has long seen price support as tool to offset China US Senate committee reviewing price floor given to MP Materials Jan 29 (Reuters) - The Trump administration is stepping back from plans to guarantee a minimum price for U.S. critical minerals projects, a tacit acknowledgment of a lack of congressional funding and the complexity of setting market pricing, multiple sources told Reuters. The shift, which comes as a U.S. Senate committee reviews a price floor extended to MP Materials MP.N last year, marks a reversal from commitments made to industry and could set Washington apart from G7 partners discussing some form of joint price support or related measures to bolster production of critical minerals used in electric vehicles, semiconductors, defense systems and consumer electronics. Sign up here. At a closed-door meeting this month hosted by a Washington think tank, two senior Trump officials told U.S. minerals executives that their projects would need to prove their financial independence without government price support, three attendees told Reuters. "We're not here to prop you guys up," Audrey Robertson, assistant secretary of the U.S. Department of Energy and head of its Office of Critical Minerals and Energy Innovation, told the executives, according to this account. "Don't come to us expecting that." U.S.-listed shares of miners producing critical minerals fell between 3% and 8% in premarket trading on Thursday. Trilogy Metals (TMQ.TO) , opens new tab was down 3.3% and MP Materials fell 4.7%, while Critical Metals (CRML.O) , opens new tab and NioCorp Developments (NB.O) , opens new tab dropped more than 5%. Ramaco Resources (METC.O) , opens new tab fell 6.4% and USA Rare Earth (USAR.O) , opens new tab was down nearly 9%. AUSTRALIA RARE EARTH SHARES SLIDE The shift would guide future deals and does not affect MP's price floor, which the government agreed to as part of an investment package last July. Robertson was joined by Joshua Kroon, the deputy assistant secretary for textiles, consumer goods, materials, critical minerals and metals at the Department of Commerce's International Trade Administration. Kroon and Robertson told the meeting that Washington is no longer in a position to offer price floors, according to the sources. The Energy Department told Reuters in a statement after the story was published that the article was “false and relies on unnamed sources that are either misinformed or deliberately misleading.” The statement did not elaborate on what errors the department said it had found. The department did not immediately respond to a request for further comment. The Department of Commerce said the assertions made in the story are false and the administration "is committed to reshoring and securing critical minerals supply chains, and that includes all available options.” MP Materials did not respond to an emailed request from Reuters for comment, but after the story was published said in a statement on X that there had been no change to its contract or to the government's obligations around it. "Any implication that the U.S. government has retreated from its commitments to MP Materials is simply false," it said. Reuters did not suggest that any part of MP's deal was in jeopardy. "Today’s Reuters report is inaccurate, misleading, and inconsistent with the facts. It follows a pattern of speculative and misleading reporting that has repeatedly mischaracterized government policy and caused unnecessary confusion in the marketplace," the company said. Kroon and Robertson did not respond to requests for comment. Shares in Australian-listed rare earths companies slid after the story was published, with those of the world's largest outside China, Lynas Rare Earths (LYC.AX) , opens new tab, down more than 10% at one point. A Lynas spokesperson said the company was benefiting from the U.S. policy step, which had lifted rare earths prices. "Price protection is most relevant for current producers, as it immediately addresses market dysfunction. Other policy instruments are available for, and have been applied to, early-stage projects," she said. The steep drop for rare earth-related shares was overdone, said analyst Reg Spencer of Canaccord in Sydney. "The comments are in line with our interpretation of the White House strategy that they don't intend to prop up every rare earths project using a price floor mechanism - projects will have to be developed on their own merits," he said. "The U.S. is still supporting the development of an ex-China critical minerals supply chain. They may just use other methods," he added. CHANGE IN TACK The administration's current stance is in contrast to a closed-door meeting held in July, where two officials separately told minerals executives that a floor price extended to MP Materials days prior was "not a one-off" and that the administration was working on price supports for other projects. Since then, the administration has taken equity positions in Lithium Americas , opens new tab(LAC.TO) , opens new tab, Trilogy Metals (TMQ.TO) , opens new tab, USA Rare Earth (USAR.O) , opens new tab and others. None were offered price floors, sparking questions about the government's commitment to that financial tool. U.S. mining and processing companies have pushed for price floors and other government backstops to help them compete with China. Industry executives argue China's state-backed producers can slash prices to punish rivals, undercut projects and deter private investment. The White House declined to say whether it plans to issue any new price floors, but said it will continue to pursue deregulation, tax cuts and targeted investments in the high-priority sector "while being good stewards of taxpayer dollars." Critics of price floors warn they could expose U.S. taxpayers to significant financial risk by forcing the government to subsidize minerals when market prices fall, potentially locking in long-term liabilities if prices remain depressed. Legal experts also caution that guaranteeing minimum prices could face challenges under U.S. procurement, trade and budget laws, particularly if such support is seen as market distortion or lacks explicit congressional authorization. Moving away from price floors does not preclude other steps Washington could take to bolster mineral projects and attempt to stabilize prices, including stockpiling, equity investments and local content stipulations. Other countries, including Australia, have also considered price floors for critical minerals. MP DEAL UNDER SPOTLIGHT The MP Materials investment sparked concern from some administration officials and members of Congress that funding for a price floor of at least $110 per kg for two types of rare earths had not been authorized by Congress, two additional sources familiar with the discussions said. The economics of mineral markets since the MP investment have shifted. USA Rare Earth said this week it intends to buy those same types of rare earths for $125 per kg on the open market. The MP investment, which included a guaranteed purchase agreement, fueled confusion over whether Washington would guarantee a price floor for others. As the Trump administration considered other potential equity investments after MP, it recognized that it did not have the congressional authority to fund a price floor, the sources said. That realization was fueled in part by an inquiry from members of the Senate Armed Services Committee, which asked Pentagon staff last year to meet to explain why MP Materials received price-floor support and the administration's strategy around minerals sector investment, according to the two sources. A committee staffer confirmed the meeting request but declined further comment. https://www.reuters.com/world/asia-pacific/us-moves-away-critical-mineral-price-floors-sources-say-2026-01-28/