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San Francisco Federal Reserve Bank President Mary Daly said that unless the Iran conflict resolves quickly and the central bank can simply “look through” a temporary increase in oil prices, it is not clear what the next move on interest rates will need to be, Reuters reported on Monday.Key quotesThere are at least two possible paths for the economy.Protracted conflict may amplify monetary policy tradeoffs. Fed needs to stay flexible on monetary policy given risks.Too much forward guidance risks a false sense of certainty.Economy impact would be short-lived if the war resolves quickly.Recognising uncertainty is optimal communication.Policy is in a good…
BNP Paribas projects Eurozone growth at 1.6% in 2026, supported by German fiscal measures, higher military and AI-related investment, and a resilient labour market. Inflation is expected to stay below 2% in 2026 before gradually accelerating in 2027. This would prompt the ECB to raise the deposit facility rate to 2.5% in the second half of 2027.Growth support sets stage for ECB”After holding up well in 2025 (1.5%), growth is expected to strengthen in 2026 (+1.6%).””The roll-out of fiscal measures in Germany and the planned increase in military spending and AI-related investment in Europe, against a backdrop of labour market…
Citing sources with knowledge, Iran’s Fars News agency reported that there are no direct communications with the United Stats (US) nor through intermediaries, per Reuters.The news outlet said that US President Donald Trump retreated after hearing that Iran would target all power plants in west Asia.US President Trump announced earlier that they have decided to postpone any military strikes against Iranian power plants following “good and productive conversations” regarding a complete and total resolution of hostilities in the Middle East.Market reactionThe US Dollar (USD) Index recovers from the session low it hit near 99.10 with the immediate reaction to US…
The rupee breached the 94/dollar barrier for the first time, slumping 50 paise to a new record closing low of 94.03 (provisional) against the greenback on Monday, as spiralling global crude prices and unabated foreign fund outflows unnerved investors.A strengthening US dollar and a steep decline in the domestic equity markets further weakened the local unit, forex traders said.At the interbank foreign exchange, the local unit opened at 93.84 and kept losing ground throughout the day, before breaching the 94-mark against the US dollar for the first time to settle at 94.03 (provisional), down 50 paise from its previous close.The…
The Indian rupee fell to a record low on Monday as Indian assets dropped on worries that the Middle East conflict could keep energy supplies disrupted for longer, raising risks for Asia’s third-largest economy.The rupee fell to 93.98 against the U.S. dollar, eclipsing its previous low of 93.7350 hit on Friday.It dipped past the 94-per-dollar mark on the interbank order matching system after the local spot trading session ended at 3:30 p.m. IST. The South Asian currency has declined about 3% since the Iran war began on February 28, hurt by an over 50% surge in oil prices and severe…
Highlights Dollar climbs as stocks tumble on Iran war IEA’s Birol warns crisis worse than 1970s oil shocks Japan says ready to counter forex volatility The dollar rose on Monday as escalating retaliatory threats in the West Asia conflict sent stocks tumbling and lifted demand for safe-haven assets.Hopes for an off-ramp to hostilities dimmed over the weekend, with US President Donald Trump threatening to strike Iran’s electricity grid and Tehran vowing to hit back at its neighbours’ infrastructure.The head of the International Energy Agency, meanwhile, said the crisis is worse than the two oil shocks of the 1970s put together.“The…
DBS Group Research economist Philip Weeargues that although risk aversion from the Iran conflict usually supports the Dollar, this time the USD’s haven appeal may prove short-lived. He points to a Fed pause versus G10 rate hikes and pressure on US Treasuries from rising fiscal concerns. The backdrop recalls last year’s credibility hit from Liberation Day tariffs.Risk-off support offset by policy headwinds”While risk aversion typically leads to a flight to the USD, this haven appeal may be short-lived.””The USD faces a hawkish wall following last week’s central meetings, which pitted a series of G10 rate hikes against a Fed pause.””Furthermore,…
Opening about 14 paise weaker at 93.8475, the Indian currency has tested a high/low of 93.81/93.95 per USD in intraday trades so far. It is currently trading at 93.9175 so far. | Photo Credit: istock.com The intensifying West Asian war, with the US-Israel alliance pounding Iran and the latter retaliating with drone/missile strikes is having a telling effect on the Rupee, which is fast depreciating towards the 94 to the US Dollar mark.Soaring energy prices, re-routing of trade routes and FPIs pulling out of the domestic equity markets is weakening the Rupee.Opening about 14 paise weaker at 93.8475, the Indian…
Gold (XAU/USD) adds to its recent heavy losses registered over the past three weeks or so and attracts some follow-through selling for the fourth consecutive day on Monday. The commodity dives to its lowest level since early January during the Asian session, though it finds some support ahead of the $4,300 mark. Any meaningful recovery, however, seems elusive in the wake of hawkish stances from major central banks, which tend to undermine the non-yielding yellow metal.The Bank of Japan (BoJ) maintained its bias toward monetary policy normalization and warned that surging Crude Oil prices driven by the Middle East conflict…
The Indian rupee fell to a record low on Monday, as an escalating Middle East conflict stoked worries over sustained disruption of energy supplies, threatening the outlook for Asia’s third-largest economy.The rupee fell to 93.95 against the U.S. dollar, eclipsing its previous low of 93.7350 hit on Friday.Asian currencies were down between 0.1% to 0.8% as hopes for an off-ramp to hostilities dimmed over the weekend with Washington and Tehran trading threats as the war entered its fourth week.The conflict has boosted oil prices by over 50% this month. The International Energy Agency has said the crisis is worse than…