2024-03-07 10:29

BRUSSELS, March 7 (Reuters) - European Union lawmakers approved on Thursday granting Ukrainian food producers tariff-free access to EU markets for another year, rejecting amendments that could have increased restrictions. The European Commission has proposed that the suspension of duties and quotas should continue until June 2025, which the European Parliament's trade committee approved by 26 for to 10 against, with one abstention. In response to EU farmer protests, the proposal also introduces an "emergency brake" for poultry, eggs and sugar, meaning tariffs would be allowed if imports exceed the average levels of 2022 and 2023. Import duties and quotas on Ukrainian farm were lifted in 2022 after Russia's invasion, which disrupted shipments via the Black Sea. Farmers have voiced anger over what they say is unfair competition from cheaper Ukrainian imports. The vote clears the last effective hurdle. The full parliament is expected to confirm approval for the extension next week before a final endorsement from EU governments, a majority of which have already backed it. Lawmakers had proposed several amendments, which were rejected, such as to add honey and cereals to the list of products subject to the brake and to include 2021 as a reference year. This was before Russia's invasion, when Ukrainian exports to the EU were curbed by tariffs and quotas. The trade committee also voted to approve a similar extension for agricultural imports from Moldova. https://www.reuters.com/world/europe/eu-backs-another-year-access-ukrainian-food-2024-03-07/

2024-03-07 10:11

MUMBAI, March 7 (Reuters) - The Indian rupee ended marginally stronger on Thursday after hitting its highest level in six months earlier in the session, as likely intervention from the central bank limited the currency's rise. The rupee closed at 82.7850 against the U.S. dollar, higher by 0.05% compared with its close at 82.8225 in the previous session. The local unit rose 0.1% in the week, logging its fourth consecutive weekly gain. While the rupee climbed to a peak of 82.7350 early in the session, the highest level since September, the Reserve Bank of India bought dollars via state-run banks which trimmed the unit's gains, traders said. In addition to the RBI's intervention, dollar demand from importers also weighed on the rupee, a foreign exchange trader at a foreign bank said. "Attempts to breach 82.70 could create room for the (dollar-rupee) pair to fall a little more ... would prefer shorts keeping a stop loss near 82.95 at current levels," the trader added. The dollar index was down slightly at 103.18, hovering close to its weakest level in a month hit on Wednesday. Most Asian currencies strengthened, with the Malaysian ringgit up nearly 0.6% and leading gains. The best-case scenario for the rupee seems to be a rise to 82.50 but sharp appreciation appears unlikely in the near term, Sajal Gupta, head of forex and commodities at Nuvama Professional Client Group's institutional desk said. Even as a bearish bias prevails across most Asian currencies, bullish bets on the Indian rupee have firmed most in two-and-a-half years, according to a Reuters poll. Investors will now keep an eye on U.S. jobless claims data due later on Thursday and the non-farm payrolls report on Friday. Indian financial markets will remain shut on Friday for a local holiday. https://www.reuters.com/markets/currencies/rupee-ends-slightly-higher-notches-fourth-straight-weekly-gain-2024-03-07/

2024-03-07 10:01

PM, finance minister say more big deals planned Cbank head calls parallel market a 'disease' Officials say they can ensure liquidity CAIRO, March 7 (Reuters) - Egyptian officials said they expected more inflows and the pound held steady on Thursday, a day after the central bank announced a shift to a more flexible exchange rate and let the currency plunge as Egypt secured an expanded $8 billion IMF programme. The pound hovered just under 49.5 to the dollar, similar to the price near closing on Wednesday, LSEG data showed. Before Wednesday's de-facto devaluation, steep interest rate hike, the central bank had held the currency for about a year at just under 31 pounds to the dollar. A more flexible exchange rate, long a key demand from the International Monetary Fund, is seen as crucial for restoring investor confidence in an economy hobbled for the last two years by a foreign currency shortage. In one sign of improved sentiment, foreign investors resumed purchases of Egyptian treasury bills after a long absence, three bankers said. The shortage has curbed local business activity and led to backlogs at ports and delays in the government's payments for commodities including wheat. Prime Minister Mostafa Madbouly said Egypt was planning on big deals to ensure liquidity and would work with merchants to stabilise prices and prioritise foreign currency access for basic commodity importers as the currency shift takes effect. Egypt expected a total of $20 billion from multilateral and other partners including the IMF, the World Bank and the European Union, Finance Minister Mohamed Maait said. The government was also committed to a programme to sell state assets and encourage private sector investment. "We are expecting to execute several deals in the various strategic sectors for an amount close to $3.5 billion," Maait told the American Chamber of Commerce in Cairo. "We are expecting more financing to come through over the short term." Egypt's international bonds, which had soared on Wednesday before falling back, declined further on Thursday, with the 2033 note down 1.62 cents on the dollar at 81.81 cents, Tradeweb data showed. Overall, Egypt's sovereign bond prices were trading at early March levels. 'ENOUGH AND MORE' Egypt has promised a move to a more flexible exchange rate system in the past, only to resume holding the currency at a fixed rate, while much of the economy depended on a black market rate that fell as low as 70 pounds. Central bank Governor Hassan Abdalla described the black market trading as a "disease" that reflected a lack of trust in the financial system. "Thankfully, I can stand here today and say we have enough to fulfil our obligations and more," he told reporters at a rare press conference late on Wednesday. The central bank would still have the ability to intervene, as in other countries, in the case of excess volatility, Abdalla said. The IMF, which agreed to add $5 billion to its existing $3 billion loan programme with Egypt, has said it is looking for a sustainable and unified exchange rate determined by the market. Under the programme, Egypt has committed to undertake structural reforms to stabilise prices, manage the debt burden and encourage private-sector growth. Abdalla said that following a 600 basis point hike on Wednesday, Egyptian interest rates, long among the highest globally, would now be on a "downward track." 'IRON FIST' Two weeks ago, Egypt signed an investment deal with Emirati sovereign fund ADQ that includes $24 billion payment for rights to develop a prime stretch of Mediterranean coastline. It also includes the conversion of $11 billion in existing deposits to be used for unspecified projects across Egypt. The Egyptian government said the total of $35 billion would be transferred within two months. Since early 2022, when the foreign currency shortage worsened, the pound has now lost more than two-thirds of its value against the dollar in a series of staggered devaluations. The war in Gaza and attacks on Red Sea shipping have put at risk receipts from tourism and Suez Canal traffic, two other main sources of hard currency. Suez Canal revenues had dropped by more than 50%, Maait said, though Egypt's tourism minister said visitor numbers rose at the start of this year. Remittances from Egyptians working abroad, the country's top single source of foreign currency, slowed sharply last year amid expectations that the pound would fall. Madbouly said on Thursday that the interior ministry would use an "iron fist" against traders who were channelling remittances outside the banking system. https://www.reuters.com/world/africa/egyptian-pound-stable-after-devaluation-imf-deal-2024-03-07/

2024-03-07 09:48

PRAGUE, March 7 (Reuters) - Czech farmers dumped manure in front of the government's office, blocked Prague streets with tractors and taunted the country's farm minister on Thursday as they renewed protests demanding more help and a halt to cheap imports to the European Union. Farmers across the EU have taken to the streets this year, calling for the removal of restrictions placed on them by a Green Deal plan to tackle climate change and for customs duties on farm products from Ukraine to be reimposed. On Wednesday, thousands of Polish farmers protested outside the prime minister's office in Warsaw, burning tyres and throwing firecrackers. Last month farmers in Brussels set tyres alight outside an EU farm ministers' meeting. Czech farmers, in their third protest since mid-February, rolled into Prague early on Thursday in hundreds of tractors, lining streets and a river road leading to the government offices, bringing traffic to a standstill in several spots. Police said farmers dumped manure in front of government headquarters, leading to one arrest. Farmers marched on foot before midday to protest in front of the government building, where they used whistles and sirens while shouting "shame" amid scattered hay bales and waving signs saying "Don't take our jobs". "The government should take farmers' demands seriously. Not only in the Czech Republic, but around Europe the future of farming is playing out," 50-year-old farmer Ivo Kasal said. "For now it looks like the Czech government wants us to be maintenance workers for the landscape." The government has said it would not be pressured in talks with farmers, with Prime Minister Petr Fiala saying on Thursday it was like "blackmail". Agriculture Minister Marek Vyborny criticised dumping manure on the street, and was interrupted by jeers several times when he appeared and addressed the demonstration. Farmers say they are the ones being put under pressure by the government and EU policies. "We have had enough," Agrarian Chamber president Jan Dolezal told the crowd outside the government office. The Agrarian Chamber has called for subsidies matching 2022 levels and programmes to support employment in farming, along with a reduced property tax for farmland. It also wants the government to help tackle a surplus in EU markets caused by cheap imports. "I don't like what they do to us, that they import rotten grains, meanwhile we can produce proper grain full of worth," tractor driver Zbynek Slajchrt, 56, said. https://www.reuters.com/world/europe/czech-farmers-dump-manure-prague-streets-renewed-protests-2024-03-07/

2024-03-07 07:48

Bullish sentiment on Indian rupee at 2-1/2 year high Malaysian ringgit most-shorted currency Bears remain on most Asian currencies March 7 (Reuters) - Bullish bets on the Indian rupee firmed most in two-and-a-half years, while investors maintained bearish positions across most Asian currencies amid uncertainty over China's economic recovery and a protracted global monetary easing timeline, a Reuters poll found on Thursday. Short bets on the Chinese yuan , the South Korean won , and the Philippine peso jumped to their highest level since Nov. 2, 2023, according to a fortnightly poll with 13 respondents. Bucking the trend, long positions on the Indian rupee increased to their highest since Sept. 9, 2021 as market participants remain optimistic on the country's economic outlook and an upside in the stock market. "I don't expect any rate cuts from the RBI (Reserve Bank of India) anytime soon so INR could gain some benefits as relatively high yield FX vs Asian peers," Poon Panichpibool, a markets strategist with Krung Thai Bank, said. High likelihood of increased inflows following the inclusion of Indian government bonds in debt indexes, coupled with hefty foreign exchange reserves, has bolstered outlook for the Indian rupee in the near-term. Meanwhile, increasing bets of a U.S interest rate cut later in the year on the back of Federal Reserve Chair Jerome Powell's comments on Wednesday, along with data pointing to an easing of labour market conditions, has pushed the greenback lower. The ringgit was the most-shorted currency in the region even as traders eased their bearish positions. The Malaysian currency has been recovering losses, but is still among the biggest laggards in Asia, having depreciated 6.5% year to date. Parisha Saimbi, an EM Asia FX strategist at BNP Paribas, attributes the ringgit's underperformance to "below trend growth in Malaysia and low real yields compared to Asian peers", among other factors. Weakness in the dollar once the Fed starts cutting policy rates should drive Asian currencies higher, benefiting the ringgit as well, with more foreign fund inflows also potentially helping the currency, Krung Thai Bank's Panichpibool said. Meanwhile, markets are keenly looking at the week-long Chinese parliamentary meeting of senior policymakers, where it set a widely expected 5% growth target for this year, for announcements on substantial policy measures to prop up the world's second-biggest economy. The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht. The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long U.S. dollars. The figures include positions held through non-deliverable forwards (NDFs). The survey findings are provided below (positions in U.S. dollar versus each currency): https://www.reuters.com/markets/currencies/bullish-positions-indian-rupee-over-two-year-high-asian-fx-bears-hold-ground-2024-03-07/

2024-03-07 06:56

NEW YORK, March 7 (Reuters) - The dollar fell across the board on Thursday, as Federal Reserve Chair Jerome Powell said the U.S. central bank is "not far" from getting enough confidence that inflation is heading to its 2% goal to start cutting interest rates. The euro initially stumbled after the ECB kept rates steady despite acknowledging cooling inflation, but recovered to log its biggest daily gain against the greenback in about a month. The common currency hit a six-week high against the broadly weak dollar. "We are waiting to become more confident that inflation is moving sustainably to 2%. When we do get that confidence, and we're not far from it, it will be appropriate to begin to dial back the level of restriction so that we don't drive the economy into recession," Powell said in a hearing before the Senate Banking Committee. Powell had told lawmakers on Wednesday that interest rate cuts were still likely in coming months but only if warranted by further evidence of falling inflation. "Powell seemed more dovish today than he did yesterday," Marc Chandler, chief market strategist at Bannockburn Global Forex, said. Investors' growing appetite for riskier assets, including stocks, also weighed on the dollar, Chandler said. The euro was 0.45% up against the dollar at $1.0944. The European Central Bank cautiously laid the ground to lower rates later this year. "We are making good progress towards our inflation target and we are more confident as a result - but we are not sufficiently confident," ECB President Christine Lagarde told a press conference. While the policymakers did not discuss cuts for this meeting, they are just beginning to discuss the dialling back of their restrictive stance, Lagarde said. That discussion signals "the ECB is getting closer and closer to that starting point for dialling back stimulus," said Bipan Rai, North America head of FX strategy at CIBC. The euro's strength on Thursday had more to do with the dollar's broad weakness than any big change in investors' attitude toward the common currency, analysts said. "We're viewing it as mainly a function of dollar dynamics," Simon Harvey, head of FX analysis at MonFX, said. "Long positioning that was built pre-Powell on a higher for longer Fed stance has been flushed out of markets over the past 24 hours," he said. Data on Thursday showed the number of Americans filing new claims for unemployment benefits was unchanged last week as the labor market continued to gradually ease. The Labor Department's February employment report is due on Friday. Meanwhile, the yen was set for its biggest jump versus the dollar this year on Thursday, driven by growing speculation that the Bank of Japan could finally raise rates this month. Against the yen, the dollar was down 0.92 % at 148.04 , the weakest in more than a month. BOJ board member Junko Nakagawa said on Thursday Japan's economy was moving steadily towards sustainably achieving the central bank's 2% inflation target. The yen has been under pressure for most of the past two years because of the gap between sub-zero Japanese interest rates and a global rise in rates, as other major central banks aggressively hiked interest rates to tame inflation. With market participants significantly short the Japanese currency, anything that even mildly supports the yen can spark a sharp move in the Japanese currency, CIBC's Rai said. "Everybody is quite considerably short the yen, I think that's what is behind the move today," Rai said. Speculators' net short positioning on the yen stood at 132,705 contracts, the largest bearish position in more than six years, according to CFTC data for the week ended Feb. 27. The pound rose 0.58% against the dollar after UK finance minister Jeremy Hunt's spring budget offered a raft of tax cuts, but little in the way of surprises for the market, leaving more focus on the direction of the U.S. dollar. In cryptocurrencies, bitcoin remained below the record high struck earlier in the week, but rose 1.8% on the day to $67,676.81. https://www.reuters.com/markets/currencies/dollar-falls-with-treasury-yields-views-looming-us-rate-cuts-2024-03-07/