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Kevin Warsh was sworn in as the 17th head of the Fed on Friday, the first chair to take the oath at the White House since Alan Greenspan in 1987, a venue choice that says plenty about how close this central bank now sits to the executive branch. The optics got stranger from there. The president used the ceremony to insist he wants Warsh to act independently and to ignore him entirely, an extraordinary thing to say from a man who spent two years publicly hounding the previous chair to cut faster, reportedly joked about suing his successor if rates…
Rabobank’s Senior FX Strategist Jane Foley notes that the Australian Dollar (AUD) has shifted from a top G10 performer to one of the weakest on a 5‑day view as markets reassess Reserve Bank of Australia (RBA) tightening prospects after softer labour data. With the Bank of Japan (BoJ) expected to hike and AUD/JPY losing momentum, Rabobank sees scope for a pullback toward the AUD/JPY112 area over three months.AUD strength fades as BoJ risk rises”The AUD has become a familiar fixture at, or close to, the top of the G10 FX performance table this year. This relates to the sharp turnaround…
Gold (XAU/USD) consolidates on Friday, remaining confined within this week’s trading range as investors cautiously monitor ongoing diplomatic efforts between the United States and Iran to reach a deal to end the war in the Middle East. At the time of writing, XAU/USD is trading around $4,517, staying on course for a second consecutive weekly decline.Indirect negotiations between the United States and Iran continue under Pakistani mediation, as Iran’s Foreign Minister Abbas Araghchi held another meeting with Pakistani Interior Minister Mohsin Naqvi to discuss the latest proposals. However, major disagreements remain unresolved. A senior Iranian source told Reuters that “no…
The rupee rose for the second consecutive session on Friday to close at 95.73 (provisional) against the US dollar on softening of crude oil prices and supposed intervention by the Reserve Bank.Forex traders said markets found some comfort after comments from US Secretary of State Marco Rubio hinted that diplomatic talks linked to the Iran situation were moving in a constructive direction.Moreover, positive domestic equities and a decline in US treasury yields also supported the rupee.At the interbank foreign exchange market, the rupee opened at 96.30 against the US dollar, then touched an intraday high of 95.30 and a low…
The Indian rupee rallied to close above the 96-per-dollar mark for the first time in a week on Friday, helped bythe central bank’s aggressive interventions to arrest the currency’s slide from 94.50 to nearly 97. The rupee closed at 95.69 per dollar, up 0.5% from its close in the previous session. The Reserve Bank of India sold $2 billion to $3 billion on Thursday and intervened in the markets again on Friday, according to bankers.Two state-run lenders were consistently selling dollars through Friday’s trading session, three traders told Reuters, adding that this marked a change from relatively subdued and intermittent…
The Reserve Bank of India sold $2 billion to $3 billion on Thursday to defend the rupee against relentless pressure and stepped in again on Friday, helping it strengthen past the 96-per-dollar level, according to bankers.The RBI intervened via large state-run banks before the market opened on Thursday, triggering a rally in the rupee, with dollar sales continuing through most of the day.The rupee rose 0.64% to close at 96.20 on the back of that intervention and extended past the 96 level on Friday, when the RBI resumed dollar sales, the bankers said.Around $500 million was sold pre-market on Thursday,…
The German IFO Institute Business Climate Index has unexpectedly improved to 84.9 in May, while it was expected to arrive lower at 84.2. The sentiment data in April has been revised higher to 84.5 from 84.4.The IFO Current Assessment Index also arrives higher at 86.1 from 85.4 in April. It was expected to drop to 85.1.Expectations Index comes higher at 83.8 vs. expectations and the previous reading of 83.5. April’s figure revised higher from 83.3.Market reactionNo immediate reaction seen in the Euro (EUR) after the data release. As of writing, EUR/USD trades subduedly around 1.1610. German economy FAQs The German…
India’s central bank may need to draw on its 2013 taper tantrum playbook and earlier balance-of-payments crises to mount an effective defence of the beleaguered rupee.The Reserve Bank of India under Governor Sanjay Malhotra is considering a range of measures to stabilize the currency, including raising interest rates, additional currency swaps and steps to raise dollars from overseas investors, Bloomberg News reported Thursday.The urgency has grown after the rupee slumped to a record low of nearly 97 per dollar this week, driving up import costs and further eroding investors’ confidence. The RBI’s immediate priority: arrest further depreciation.“It’s important to avoid…
Silver price (XAG/USD) declines after two days of gains, trading around $76.10 per troy ounce during the Asian hours on Friday. The non-yielding white metal struggles amid rising odds of hawkish sentiment surrounding the Federal Reserve (Fed) policy stance.Elevated energy prices linked to the Strait of Hormuz threaten to feed into core US consumer prices and inflation expectations, which could potentially push the Fed to keep interest rates higher. Furthermore, a stronger US economic growth outlook is adding weight to the case for monetary tightening and putting pressure on non-interest-bearing assets, including Silver.Fed officials remain cautious as they evaluate whether…
The dollar held near a six-week top on Friday, after a volatile overnight session on conflicting signals over a U.S.-Iran peace deal, though investors latched on to hopes of some progress. Washington and Tehran stuck to opposing stances over the latter’s uranium stockpile and control of the Strait of Hormuz, although U.S. Secretary of State Marco Rubio said there had been “some good signs” in talks. The mixed messages whipsawed markets overnight, though moves in currencies were largely subdued in early Asian trade on Friday as investors awaited more clarity.The dollar was a touch higher and stood at 99.24 against…