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☆ Instant View: China's Q2 GDP growth slows to 0.8% q/q, raises stimulus expectations
▼ + stars: | 2023-07-17 | by ( ) www.reuters.com time to read: +11 min

"Consumers are not spending, mainly driven by the bleak outlook for the property market. Disappointing retail numbers and property market sales show it doesn't seem that the boost from rate cuts is sufficient. ..the property market is beginning another slowdown - the government will have to come up with more stimulus for property." "Nonetheless, we think more stimulus is required to stabilise and restore confidence in the property market." ZHIWEI ZHANG, CHIEF ECONOMIST, PINPOINT ASSET MANAGEMENT, HONG KONG"Nominal GDP growth turns out to be lower than real GDP growth in Q2, the first time since comparable data are available in Q4 2016.

Persons: CHRISTOPHER WONG, LOUIS KUIJS, CAROL KONG, XING ZHAOPENG, KEN CHEUNG, ALVIN TAN, VISHNU VARATHAN, MARCO SUN, CHEN, TONY SYCAMORE, ZHIWEI ZHANG, JING LIU Organizations: Gross, National Bureau, Statistics, Shanghai, NBS, BANK OF, ANZ, MIZUHO BANK, OF, OF ASIA FX, RBC, MUFG BANK, IG, SYDNEY, Friday's, BANK OF SINGAPORE, HSBC, stoke, Authorities, Reuters, U.S, Thomson Locations: U.S, SINGAPORE, ASIA, HONG KONG, SYDNEY, CHINA, SHANGHAI, OF ASIA, China

"The data suggests that China's post-COVID boom is clearly over," said Carol Kong, economist at Commonwealth Bank of Australia in Sydney. Authorities are likely to roll out more stimulus steps including fiscal spending to fund big-ticket infrastructure projects, more support for consumers and private firms, and some property policy easing, policy insiders and economists said. Most analysts say policymakers are likely to dole out modest supportive measures, instead of embracing any aggressive stimulus due to limited room and worries of growing debt risks, analysts said. For June alone, China's retail sales grew 3.1%, slowing sharply from a 12.7% jump in May, the data showed. Industrial output growth unexpectedly quickened to 4.4% last month from 3.5% seen in May, but demand remains lukewarm amid a bumpy post-COVID economic recovery.

Persons: Carol Kong, Alvin Tan, Kevin Yao, Ellen Zhang, Joe Cash, Shri Navaratnam Organizations: National Bureau, Statistics, Commonwealth Bank of Australia, Authorities, Asia FX, RBC Capital Markets, stoke, Thomson Locations: BEIJING, Shanghai, Sydney, China, Asia, Singapore

☆ Dollar firms on rate hike views after Fed minutes, yen treads water
▼ + stars: | 2023-07-06 | by ( Rae Wee | ) www.reuters.com time to read: +2 min

SINGAPORE, July 6 (Reuters) - The dollar was broadly higher on Thursday, after the release of minutes from the Federal Reserve's latest policy meeting cemented market expectations for a rate hike this month. Against the dollar, the euro touched a near one-week low of $1.0843 in early Asia trade, while sterling dipped 0.08% to $1.26925. Markets are now pricing in an 89% chance that the Fed will raise rates by 25 basis points at its policy meeting later this month, according to the CME FedWatch tool. Elsewhere, the yen rose more than 0.2% to 144.30 per dollar, as worries over potential intervention from Japanese authorities to shore up the yen capped its decline. The Chinese yuan last bought 7.2593 per dollar in the offshore market , after having fallen about 0.4% the previous session.

Persons: Alvin Tan, Sean Callow, it's, Rae Wee, Jacqueline Wong Organizations: Federal, Treasury, Asia FX, RBC Capital Markets, Fed, Westpac, Thomson Locations: SINGAPORE, Asia, China

The greenback was down 0.18% at 1104 GMT to 144.44 yen , after rising 0.27% on Monday. However, the yen remained close to last week's almost eight-month low of 145.07 per dollar, which prompted Japan's Finance Minister Shunichi Suzuki to warn against excessive yen selling. Market activity was relatively subdued with U.S. markets closed for the July 4 public holiday. Across currency markets, investors remained on watch for possible intervention by Japanese authorities to stem yen losses. Tan said the dollar is likely to rise past 150 yen, which would make intervention "more likely than not".

Persons: Shunichi Suzuki, Alvin Tan, Masato Kanda, Janet Yellen, Charu, Tan, Harry Robertson, Ankur Banerjee, Kevin Buckland, Shri Navaratnam, Emma Rumney, Christina Fincher Organizations: LONDON, Japan's Finance, U.S, Federal, U.S ., Asia FX, RBC Capital Markets, Reserve Bank of Australia, Australian, Treasury, Reuters, Saxo Markets, Japan, Bank, Bank of, Thomson Locations: SINGAPORE, Asia, Bank of Japan, London, Singapore

☆ China starts to slow yuan's one-way slide
▼ + stars: | 2023-06-27 | by ( ) www.reuters.com time to read: +4 min

Analysts said that together the moves showed official unease at the yuan's downward momentum and that they could slow but perhaps not halt a decline, given the dour economic outlook. "They are sending more signals now they're uncomfortable ... they would like to slow the yuan weakness," said Moh Siong Sim, a currency strategist at Bank of Singapore. The yuan ended Monday at a seven-month low of 7.2425 per dollar and was at 7.2105 in Tuesday afternoon trade. BACK FOOTThe push back comes as investors sour on China, with data showing China's vaunted rebound faltering. Analysts said moves to halt the yuan's slide were not yet as firm as last year, when regulators rolled out measures to encourage capital inflows, but might be enough to slow selling.

Persons: Yuan, Siong Sim, Stocks, Alvin Tan, We've, Rob Carnell, Carnell, That's, Ankur Banerjee, Tom Westbrook, Rae Wee, Vidya Ranganathan, Kim Coghill, Jacqueline Wong Organizations: People's Bank of China, Analysts, Bank of Singapore, UBS, Australian, Asia FX, RBC Capital Markets, Beijing, Thomson Locations: SHANGHAI, BEIJING, China, Hong Kong, Asia, Shanghai, Singapore

☆ Dollar steady, with Fed pause eyed in busy c.bank week
▼ + stars: | 2023-06-12 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Policy meetings of the Fed, the European Central Bank (ECB) and the Bank of Japan (BOJ) will set the tone for the week, as markets seek clues from policymakers on the future path of interest rates. The U.S. dollar index clocked a loss of nearly 0.5% last week, its worst weekly drop since mid-April, and was last marginally higher at 103.58. The euro slipped 0.02% to $1.0744 in early Asia trade, after having risen 0.4% last week, its first weekly gain in roughly a month. "Central banks have raised rates aggressively over the past 12-15 months and given the lagged effects with which monetary policy affects demand, are central banks teeing up for a pause, following the RBNZ's example?" "We change our BOJ call to no YCC revision at this week's meeting," said Societe Generale's Jin Kenzaki, referring to the central bank's controversial yield curve control policy.

Persons: Alvin Tan, Jin Kenzaki, Rae Wee, Muralikumar Organizations: European Central Bank, Bank of Japan, Asia FX, RBC Capital Markets, Money, U.S, Reuters, ECB, ANZ, Reserve Bank of New, Thomson Locations: SINGAPORE, Asia, Australia, Reserve Bank of New Zealand

☆ Dollar steady, with Fed pause eyed in busy central bank week
▼ + stars: | 2023-06-12 | by ( ) www.cnbc.com time to read: +3 min

Policy meetings of the Fed, the European Central Bank and the Bank of Japan will set the tone for the week, as markets seek clues from policymakers on the future path of interest rates. The U.S. dollar index clocked a loss of nearly 0.5% last week, its worst weekly drop since mid-April, and was last marginally higher at 103.58. "Outside of the decisions that the central banks make at this meeting, what will be of particular interest is their forward guidance," economists at ANZ wrote in a note. "Central banks have raised rates aggressively over the past 12-15 months and given the lagged effects with which monetary policy affects demand, are central banks teeing up for a pause, following the RBNZ's example?" "We change our BOJ call to no YCC revision at this week's meeting," said Societe Generale's Jin Kenzaki, referring to the central bank's controversial yield curve control policy.

Persons: Alvin Tan, Jin Kenzaki Organizations: European Central Bank, Bank of Japan, Asia FX, RBC Capital Markets, Money, U.S, Reuters, ECB, ANZ, Reserve Bank of New Locations: Asia, Australia, Reserve Bank of New Zealand

SHANGHAI/SINGAPORE, June 2 (Reuters) - China's yuan has skidded to six-month lows against the dollar and analysts say it could weaken further as investors fret over a bumpy pandemic recovery in the world's second-largest economy. "The yuan suffers as China's reopening story is less appealing than before, and there is no sign of further stimulus," said Gary Ng, senior economist for Asia Pacific at Natixis. "A weaker currency at the current juncture can help export performance, especially as global trade is shrinking this year." "A weaker yuan helps exporters when they convert the dollar receivables to yuan," said Barclays' FX strategist Lemon Zhang. A weaker yuan might also temper deflationary pressures being seen in parts of the economy due to weak domestic demand.

Persons: Gary Ng, Alvin Tan, Tan, Tommy Wu, Lemon Zhang, Serena Zhou, Winni Zhou, Brenda Goh, Tom Westbrook, Kim Coghill Organizations: Asia Pacific, Reuters, People's Bank of China, Asia FX, RBC Capital Markets, Barclays, FX, Mizuho Securities, Thomson Locations: SHANGHAI, SINGAPORE, United States, Natixis, Asia, China, Shanghai, Singapore

As doubts grow about the strength of its economic recovery, foreign money has left China's markets and the currency has fallen 4% against the dollar since late January. Analysts at Nomura and Societe Generale say the yuan could soon head for 7.3, which as last plumbed in November. Reflecting that, the trade-weighted CFETS basket against which the People's Bank of China (PBOC) manages the currency, has dropped to 99 from 100 in February. THE CHEAP CURRENCYBecky Liu, head of China macro strategy at Standard Chartered Bank, expects the yuan will continue to depreciate. "The interest rate gap remains wide, so many hedge funds continue to use yuan as a funding currency," Liu said.

☆ Why is the US dollar so strong again?
▼ + stars: | 2023-05-18 | by ( Harry Robertson | ) www.reuters.com time to read: +4 min

LONDON, May 18 (Reuters) - If investors agree on one thing this year, it's that the dollar is going to fall. The go-to explanation of currency strategists right now is the debt-ceiling debacle is boosting the dollar. Traders currently expect the U.S. central bank to cut interest rates sharply later this year as a recession takes hold, yet Tan is skeptical. If the dollar rises slightly, some traders may be forced to close out their short positions by buying the dollar, which then boosts its value. But a simple technical indicator is that it is very atypical for you to have a straight-line decline in the dollar."

The greenback took an early dive after data showed the New York Federal Reserve's Empire State manufacturing index plunged to -31.8 this month from a reading of 10.8 in April. "The things that have weighed on the dollar recently have not gone away, such as the debt ceiling, even though there has been some progress made." In late morning trading the dollar index , which measures the greenback's value against six major peers, fell 0.2% to 102.48. Analysts have said many factors could be behind the dollar's recent strength, including concerns about U.S. inflation and safe-haven buying driven by fears about the debt ceiling standoff and global economic growth. It earlier jumped to 19.7 for the first time since March 10, when it hit a record high of 19.8 on a volatile trading day.

SINGAPORE, May 15 (Reuters) - The U.S. dollar fell slightly from a five-week high on Monday after a period of strength that has confused analysts. The euro was up 0.27% against the dollar on Monday at $1.088, rebounding after falling 1.54% the previous week. That helped send the dollar index , which measures the greenback against six major peers, down 0.19% to 102.49. Alvin Tan, head of Asia FX strategy at RBC Capital Markets, said a pick-up in U.S. bond yields over the last two days had supported the currency. "If you remove the uncertainty around the debt ceiling situation, the sentiment has been turning bearish against the dollar," said Khoon Goh, head of Asia research at ANZ.

☆ Indian rupee to see more losses on dollar spike and higher U.S. yields
▼ + stars: | 2023-05-15 | by ( Nimesh Vora | ) www.reuters.com time to read: +2 min

MUMBAI, May 15 (Reuters) - The Indian rupee is expected to weaken on Monday, adding to last week's losses, tracking a rally on the dollar index and higher U.S. yields on worries surrounding U.S. inflation. The dollar index climbed 0.6% on Friday to reach its highest level in a month and the two-year U.S. yield was back to nearly 4%. Renewed worries over the inflation outlook in the U.S. pushed yields higher and supported demand for the dollar. "Their assessments of whether recent labour market and inflation data support pausing in June or not will be scrutinised," ANZ said in a note. India's inflation data was "supportive" of the rupee in the medium term, the trader said.

☆ Dollar languishes as bank crisis fears ebb on Credit Suisse rescue
▼ + stars: | 2023-03-21 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, March 21 (Reuters) - The dollar regained some ground on Tuesday but was pinned near a five-week low as traders tiptoed back into riskier assets after UBS' state-backed takeover of Credit Suisse allayed some fears of a widespread, systemic banking crisis. "There has been pretty modest demand for U.S. dollars at the Fed swap lines, so that is a positive sign in and of itself," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA). The dollar slipped 0.12% to 131.15 against the Japanese yen , while the U.S. dollar index , which measures the greenback against a basket of currencies, fell 0.04% to 103.30. Lower U.S. rate expectations also added to downward pressure on the dollar ahead of the Fed's two-day policy meeting commencing later on Tuesday. The Reserve Bank of New Zealand said on Tuesday it saw no immediate need to request the reinstatement of a U.S. dollar swap line that expired in 2021.

☆ Cautious calm returns to bank stocks as focus shifts to regulation
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +5 min

Focus is also shifting to the possibility of tighter regulation in the U.S. banking sector, particularly for mid-tier banks like SVB (SIVB.O) and New York-based Signature Bank, whose collapses last week roiled financial markets. Investors had been particularly concerned about the huge bond holdings, particularly in U.S. Treasuries, of Japanese lenders. However, Japanese finance minister Shunichi Suzuki said on Wednesday differences in the structure of bank deposits, meant local banks wouldn't face incidents similar to SVB's collapse. In an attempt to avert a similar crisis down the line, the Federal Reserve is also considering tougher rules and oversight for midsize banks similar in size to SVB. "A year after starting to raise interest rates, the Federal Reserve is still chasing evidence that higher borrowing costs are slowing the U.S.

☆ VIEW US intervenes to shore up SVB deposits, stem financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +10 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. The fact that SVB and Signature Bank depositors will be made whole is critical in maintaining trust in the financial system and should help stem contagion fears this week. But it also means that 50 basis points (a possible Fed interest rate hike) is off the table." Given what's happened in the U.S. financial system, a 25 basis point hike is more likely than a 50 basis point hike."

☆ Instant view: US intervenes to shore up SVB deposits, limit financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +11 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. ALVIN TAN, HEAD OF ASIA FX STRATEGY, RBC CAPITAL MARKETS, SINGAPORE:"Markets remain unsettled from the SVB failure. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. ANTHONY SAGLIMBENE, CHIEF MARKET STRATEGIST, AMERIPRISE FINANCIAL, TROY, MICHIGAN:"It was imperative that regulators stepped in and decisively acted before markets around the world opened for the week. GREG MCBRIDE, CHIEF FINANCIAL ANALYST, BANKRATE:"While the Fed has talked about a lot in the past year, until today it has been in the context of monetary policy.

☆ Instant view: Incoming BOJ chief Ueda says current low rates appropriate
▼ + stars: | 2023-02-24 | by ( ) www.reuters.com time to read: +6 min

Feb 24 (Reuters) - Incoming Bank of Japan (BOJ) Governor Kazuo Ueda said on Friday it was appropriate to maintain ultra-loose monetary policy as inflation has yet to sustainably and steadily meet the central bank's 2% target. "I think he's intentionally doing that, so that the market will calm down a little bit about policy change expectations." "I don't think Ueda has the same stance as (Haruhiko) Kuroda but it is not clear whether Ueda would tweak the BOJ policy as the market expected." CHARU CHANANA, MARKET STRATEGIST, SAXO MARKETS, SINGAPORE"No surprises there, we expected Ueda to take it slow and he's starting off echoing Kuroda's views. He has been out of touch with the BOJ policy making since 2005 and will take time even if he was to consider policy normalisation at some stage."

LONDON/SINGAPORE, Feb 22 - The dollar rose slightly on Wednesday, continuing to trade near six-week highs on the back of strong economic data. Survey data released on Tuesday showed U.S. business activity unexpectedly rebounded in February to reach its highest in eight months. On Wednesday, the euro was down 0.15% at $1.063, just above Friday's six-week low of $1.061. EuroThe dollar index was up 0.13% at 104.28, not far off the six-week high of 104.67 hit at the end of last week. Themos Fiotakis, head of FX strategy at Barclays, said he still expcts the dollar to fall by the end of the year.

LONDON/SINGAPORE, Jan 31 (Reuters) - The dollar ticked higher on Tuesday ahead of a raft of central bank decisions but remained on track for its fourth consecutive monthly loss. The Federal Reserve will set interest rates on Wednesday, followed by the European Central Bank (ECB) and Bank of England (BoE) on Thursday. That meant it was set for its fourth monthly drop, having fallen around 11% since hitting a 20-year peak in late September. Investors then expect the ECB and BoE to raise their main interest rates by 50 bps each on Thursday. Sterling was last 0.29% lower at $1.231, but was on track for its fourth monthly increase.

The euro was down 0.12% against the dollar at $1.088, just off the $1.093 level reached on Friday, which was the highest since early May. Meanwhile, the dollar was up 0.1% against the yen , at 130.28 yen per dollar, having hit an 8-month low of 127.22 on Jan. 16. Those expectations have caused the dollar index , which surged on the back of Fed rate hikes last year, to fall more than 11% from September's 20-year high of 114.78. Expectations of further rate increases by the European Central Bank have also aided sentiment and supported the euro. The U.S. dollar was little changed against its Canadian counterpart ahead of the Bank of Canada's latest rates decision on Wednesday, buying C$1.337.

☆ Dollar edges up as darkening growth outlook hurts sentiment
▼ + stars: | 2022-12-07 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, Dec 7 (Reuters) - The dollar crept higher on Wednesday as top executives from the biggest U.S. banks warned of an impending recession, which dampened risk appetite and kept the greenback supported. Against the dollar, sterling fell 0.4% overnight, and was last 0.05% lower at $1.2128. It's part of our baseline," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia. Against a basket of currencies, the U.S. dollar index was last 0.05% higher at 105.60. The offshore yuan was last marginally higher at 6.9845 per dollar, having been supported by an easing of China's strictest COVID-19 restrictions.

☆ Volatility in yuan spurs bets China will widen its band
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +4 min

SHANGHAI, Nov 30 (Reuters) - As macroeconomic risks induce unprecedented levels of volatility in China's yuan, investors are betting that authorities may widen the currency's tight trading band for first time since 2014 to allow market forces greater say. Day-to-day yuan volatility has been as high as 16% on some days in October, compared with a tame 1% to 4% range in the months and years before. Policy sources have told Reuters they have considered widening the trading band over the past few years to show their commitment to long-term market reforms. Rising volatility in yuan-rouble trading earlier this year prompted the central bank to double the trading band for the pair to 10% in March. Yet, most analysts who think a band widening is due also do not think it is imminent.

The euro rose ahead of inflation data due on Wednesday. The Aussie , often used as a liquid proxy for the yuan, rose 1.2% to $0.6734. EURO ZONE INFLATIONThe euro was up 0.4% at $1.0380, not far from a five-month peak of $1.0497 hit on Monday. Flash euro zone inflation figures for November are due on Wednesday, with economists polled by Reuters expecting inflation to come in at 10.4% year-on-year. St. Louis Fed President James Bullard said the Fed needed to raise interest rates quite a bit further, while New York Fed President John Williams and Richmond Fed President Thomas Barkin echoed similar views.

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