Oil prices rise 3% on support from US-China trade hopes

NEW YORK – Oil prices rose around 3% on Thursday, buoyed by hopes of a breakthrough in looming trade talks between the US and China, the world’s two largest oil consumers.

Brent crude futures settled up USD 1.72, or 2.8%, at USD 62.84 a barrel. US West Texas Intermediate crude rose USD 1.84, or 3.2%, to USD 59.91.

US Treasury Secretary Scott Bessent will meet with China’s top economic official on May 10 in Switzerland for negotiations over a trade war that is disrupting the global economy. Optimism around those talks was providing support to the market, said SEB analyst Ole Hvalbye.

The countries are the world’s two largest economies and fallout from their trade dispute was likely to lower crude consumption growth.

Analysts cautioned that the recent tariff-driven volatility in the oil market was not over.

“The global risk premium that was pushing oil prices up and down during the past couple of years has been replaced by a tariff premium that will also be fluctuating in response to the latest headlines out of the Trump administration,” Jim Ritterbusch, of US energy consultancy Ritterbusch and Associates, said in a note.

In another trade development, US President Donald Trump and British Prime Minister Keir Starmer announced a “breakthrough deal” on trade that leaves in place a 10% tariff on goods imported from the UK while Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to US goods.

On the supply front, the Organization of the Petroleum Exporting Countries and its allies in OPEC+ will increase its oil output, pressuring prices.

OPEC oil output edged lower in April despite a scheduled output hike taking effect, a Reuters survey found, led by a cut in Venezuelan supply on renewed US attempts to curb the flows and smaller drops in Iraq and Libya.

Analysts at Citi Research lowered their three-month price forecast for Brent to USD 55 per barrel from USD 60, but maintained their long-term forecast of USD 60 a barrel this year.

A US-Iran nuclear deal could drive Brent prices down toward USD 50 per barrel on increased global supply, but without a deal prices could rise to over USD 70, they added.

US sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington’s stepped-up pressure is inflicting on Tehran’s biggest oil buyer.

(Reporting by Stephanie Kelly in New York, Seher Dareen in London, Katya Golubkova in Tokyo and Emily Chow in Singapore; Editing by David Evans and Ed Osmond, Kirsten Donovan and David Gregorio)

Dollar rises against safe-haven currencies buoyed by US-UK trade deal

NEW YORK – The US dollar gained against the safe-haven yen and Swiss franc on Thursday with market nerves soothed by a bilateral trade deal between the United States and the United Kingdom, while sterling reversed gains made after an interest rate cut from the Bank of England.

US President Donald Trump announced a “breakthrough” trade agreement with Britain on Thursday, which leaves in place a baseline 10% tariff on British imports including vehicles.

The market sees the trade deal as positive because it means Trump is envisioning a 10% baseline for friendly countries with anything beyond that subject to negotiation, said Axel Merk, president and chief investment officer at Merk Hard Currency Fund in California.

“The market for whatever reason today takes that as good news. In my view, a 10% baseline tariff is still very high for goods coming into the US and does change in my assessment how global trade operates,” Merk said.

The dollar rose to a four-week high of 146.175 against the yen following the announcement of the trade deal. It was last up 1.55% at 146 yen.

Against the Swiss franc, it was 1.07% stronger at 0.8323 franc, matching its highest level since May 1.

The deal could serve as a template for other countries looking to sign trade agreements with the US, said Steve Englander, head of global G10 FX Research at Standard Chartered in New York.

“Getting a deal that looks like it’s going to work is going to be risk positive. I think the market will look at what’s disclosed and ask how much of this will be applicable to other countries or if it’s going to be the template for other deals,” Englander said.

Wall Street’s main indexes, including the benchmark S&P 500, buoyed by market optimism on the trade deal. Gold prices fell with the dollar advancing. Spot gold fell 1.74% to USD 3,305.76 an ounce.

Trump said he expects substantive negotiations between the United States and China when Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer meet China’s economic tsar, He Lifeng, in Switzerland on Saturday.

The BoE’s Monetary Policy Committee voted 5-4 to cut rates by a quarter point, in line with expectations. But there was an unexpected divergence among voting members: two, Swati Dhingra and Alan Taylor, voted for a bigger half-point cut while Chief Economist Huw Pill and external member Catherine Mann wanted to hold interest rates.

The BoE’s decision came a day after the US Federal Reserve held interest rates but said the risks of higher inflation and unemployment had risen.

Sterling gave up earlier gains and was down 0.37% at USD 1.32410.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.41% to 100.31, hitting its highest since April 10. The euro was down 0.71% at USD 1.122175.

The dollar also gained against both the Swedish and Norwegian currencies after Sweden’s Riksbank and Norway’s Norges Bank held rates, as expected. The Swedish crown was up 0.94% at 9.7471 per dollar, while the Norwegian crown was last at 10.4313 per dollar, up 0.99%.

In cryptocurrencies, bitcoin gained 4.68% to USD 101,293.99. Ethereum rose 16.29% to USD 2,091.29.

(Reporting by Chibuike Oguh in New York; Editing by Kirsten Donovan and Diane Craft)

Dollar retains strength against peers after Fed rate decision

NEW YORK – The US dollar remained slightly stronger against major currencies, including the yen and the euro, on Wednesday after the Federal Reserve left interest rates unchanged, in line with market expectations.

The Fed kept its benchmark interest rate steady in the 4.25%-4.50% range, but said that the risks of higher inflation and unemployment had risen and that the US economic outlook remains uncertain.

“They were a little more hawkish than a lot of the market expected, and they didn’t really change or water down any of the views on inflation being above average or the jobs market selling at a low level,” said Marvin Loh, senior global market strategist at State Street in Boston.

“I still think we’re in an extended hold period until data tells them that they need to do something and/or we get a lot more trade clarity,” Loh added.

The greenback was up 1% versus the yen at 143.840, breaking a three-day falling streak, with Japanese markets reopening after a two-day holiday.

During his subsequent press conference, Fed Chair Jerome Powell said the central bank cannot make preemptive policy decisions until there is clarity about where the economy is headed.

The US dollar was up 0.09% against the Swiss franc in choppy trading at 0.82210 franc. On Monday, it hit its lowest since January 2015 of 0.8032.

“The statement had only small changes and the theme which we expected – which is, ‘The Fed is feeling the tensions between the two sides of its mandate,'” said Vassili Serebriakov, FX strategist at UBS in New York. “The FX market is well aware of this and that probably explains the lack of initial reaction.”

President Donald Trump suggested on Wednesday that China initiated upcoming senior-level trade talks between the two countries and said he was not willing to cut US tariffs on Chinese goods to get Beijing to the negotiating table.

Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s economic tsar, He Lifeng, in Switzerland on Saturday for talks, which could lead to a potential thawing of trade tensions.

The euro was down 0.44% at USD 1.131650, snapping three straight session of gains.

German conservative leader Friedrich Merz was elected chancellor by parliament on Tuesday in a second round of voting after an unprecedented defeat on the first attempt.

The Bank of England will likely cut interest rates on Thursday. The pound sterling was down 0.52% to USD 1.3310 but up 0.21% to 0.85080 against the euro.

The Taiwan dollar has steadied after surging against the greenback since Trump’s April 2 announcement of sweeping tariffs on trade partners.

The Chinese yuan weakened 0.22% against the greenback to 7.227 per dollar as China announced a long-awaited rate cut.

(Reporting by Chibuike Oguh in New York, Stefano Rebaudo, additional reporting by Rocky Swift; Editing by Bernadette Baum, Ros Russell, Will Dunham, and Deepa Babington)

Oil settles lower as hopes dim for US-China trade and supply worries ease

NEW YORK – Oil prices fell by more than USD 1 a barrel on Wednesday as investors doubted that upcoming US-China trade talks would result in a breakthrough, while hopes for an Iran-US nuclear deal eased supply worries.

Brent crude futures settled USD 1.03, or 1.66%, lower at USD 61.12 a barrel while US West Texas Intermediate crude lost USD 1.02, or 1.73%, lower at USD 58.07 a barrel.

The US and China are due to meet in Switzerland, which could be the first step toward resolving a trade war disrupting the global economy.

The trade talks between the world’s two largest economies come after weeks of escalating tensions. Duties on goods imports between the countries have soared well beyond 100%.

“While the meeting may signal a thaw, expectations for a breakthrough remain low,” said Thiago Duarte, market analyst at Axi. “Unless the US receives major trade concessions, further de-escalation seems unlikely,” he said.

Asked about the upcoming trade meeting with Chinese officials, US Treasury Secretary Scott Bessent described the talks as “the opposite of advanced.”

US Vice President JD Vance described Washington’s talks with Iran as “so far, so good” and said there was a deal to be made that would reintegrate Iran into the global economy while preventing it from getting a nuclear weapon.

“There is a possibility that the US could be lifting the sanctions on Iranian oil, which right now is under maximum pressure,” said Phil Flynn, senior analyst with Price Futures Group.

The US had threatened secondary sanctions on Iran after a fourth round of talks were postponed between Washington and the OPEC member with production of more than 3 million barrels per day, or about 3% of global output.

The Federal Reserve held interest rates steady but said the risks of higher inflation and unemployment had risen, further clouding the economic outlook as the US central bank grapples with the impact Trump’s tariff policies.

Both benchmarks were pressured by data from the Energy Information Administration (EIA) showing gasoline inventories in the US rose unexpectedly last week, raising concerns of weak demand ahead of US summer driving season.

“This is the first bad report for gasoline in a couple of weeks. The refiner had been cranking up the utilization rate. But today in this report it went backwards,” said Bob Yawger, director of energy futures at Mizuho.

However, US crude inventories fell by 2 million barrels to 438.4 million barrels in the week, compared with analysts’ expectations in a Reuters poll for an 833,000-barrel draw.

Limiting the losses, some US producers have signaled they would cut spending, cautioning the country’s oil output may have peaked.

Additionally, conflict in the Middle East between Israel and the Houthis increases the geopolitical risk premium, said Tamas Varga, an analyst at PVM.

Volatility is expected to persist on quicker-than-expected OPEC+ supply, while US policymaking remains unpredictable, he added.

(Reporting by Nicole Jao in New York, Seher Dareen in London, and Jeslyn Lerh in Singapore; Editing by Kate Mayberry, Saad Sayeed, Alex Lawler, Ros Russell, Ed Osmond, Louise Heavens, Jan Harvey, Diane Craft, and David Gregorio)

US yields dip as Fed flags economic risks, signals patience on rate moves

NEW YORK – US Treasury yields slipped on Wednesday after the Federal Reserve held interest rates steady, as expected, but noted that the risk of higher inflation and unemployment has increased.

Fed Chair Jerome Powell, in a press conference after the US central bank’s latest policy meeting, emphasized the high degree of uncertainty brought on by the Trump administration’s tariffs. As a result, the Fed cannot be pre-emptive when it comes to monetary policy, he said, and has to wait and see how things play out on the tariff front.

“It’s not a situation where we can be pre-emptive because we actually don’t know what the right response to the data will be until we see more data,” Powell said.

The benchmark 10-year yield fell to 4.275%, down 4.3 basis points (bps). US 30-year yields also dropped, down 4 bps to 4.773%.

On the front end of the curve, the two-year yield, which reflects interest rate expectations, was down by less than a basis point at 3.781%.

The Fed’s policy-setting Federal Open Market Committee kept the central bank’s benchmark interest rate steady in the 4.25%-4.50% range, but pointed to economic uncertainty amid mounting risks of elevated inflation and joblessness.

“The Committee is attentive to the risks to both sides of its dual mandate,” the FOMC said in its statement.

Ali Hassan, a portfolio manager at Thornburg Investment Management, said given the ongoing turmoil, the Fed’s reaction function – when and how deeply it responds – has been up for debate.

“The consensus is that the Fed is unlikely to make such a move without more evidence. How much pain the economy must suffer for the Fed to waive off the inflation risk and pivot to supporting economic growth” is not clear at the moment,” Hassan said.

“The Fed has claimed to be data-dependent, but in such a fast-moving situation, we’ll want to understand what soft and leading data they are weighing most in calibrating policy,” said Hassan, who thinks the central bank should cut rates at its meeting next month.

ONUS ON LABOR MARKET

The US Treasury yield curve flattened following the release of the Fed statement, with yields on the long end lower than those on the front end, suggesting the Fed is unlikely to ease at the next meeting in June.

The spread between two-year and 10-year yields narrowed to 49.4 bps on Wednesday, compared with 51 bps late on Tuesday. Typically under a Fed easing cycle, the curve steepens, with short-dated Treasury yields tied to rate cuts.

The benchmark federal funds futures market is pricing in more than a 70% chance that the Fed will resume its rate cuts at its July 29-30 policy meeting, according to LSEG calculations. It also sees about 82 bps of easing this year.

“Recent better-than-feared jobs data has supported the Fed’s on-hold stance, and the onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle,” Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management in New York, said in emailed comments.

“Any weakening in the labor market, however, could take a number of months to become apparent and we see the odds skewed towards another ‘hold’ at next month’s meeting.”

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Will Dunham, Deepa Babington, and Paul Simao)

Gold drops over 1% on Powell’s cautious views, easing trade tensions

Gold prices extended losses on Wednesday, weighed by a stronger dollar and easing China-US trade tensions, while traders were left dissatisfied by Federal Reserve Chair Jerome Powell’s cautious remarks on the US economy.

Spot gold, which was already down more than 1% before the meeting, slipped further after Powell’s comments. It was down 1.8% to USD 3,368.42 an ounce by 03:32 ET (19:32 GMT), while US gold futures settled 0.9% lower at USD 3,391.9.

The US dollar gained 0.6% against a basket of major currencies, making bullion more expensive for non-dollar buyers.

The Federal Open Market Committee (FOMC) concluded its two-day policy meeting with a unanimous decision to leave interest rates unchanged at 4.25%-4.50%, where they’ve been since December.

“Uncertainty about the economic outlook has increased further,” the FOMC said in its post-meeting statement.

Federal Reserve Chair Jerome Powell reinforced that sentiment, saying the central bank cannot act pre-emptively when the path forward is unclear.

“Powell held his cards very close repeating the message of the Fed will ‘wait and see’ and that it cannot be pre-emptive. It leaves the market a little dissatisfied, which will do nothing to change gold’s strong bullish bias,” said Tai Wong, an independent metals trader.

“Dips will be bought as gold is the one market where investors are highly confident,” he added.

Gold, seen as a safe haven asset in uncertain times, has surged 28.6% this year, amid geopolitical risks and strong central bank buying. China’s central bank added to reserves for a sixth straight month in April.

“I think a big part of (gold’s fall) is China and the US coming together for tariff talks. The Fed announcement just seems really neutral from what Powell’s saying right now… So there’s no surprises there,” Daniel Pavilonis, senior market strategist at RJO Futures said.

US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer are scheduled to meet Chinese economic tsar He Lifeng in Switzerland this weekend, a move seen as a potential breakthrough in resolving trade tensions.

Elsewhere, spot silver dropped 2.9% to USD 32.27, while platinum fell 0.9% to USD 975.60 and palladium was down 1.2% at USD 963.34 per ounce.

(Reporting by Sherin Elizabeth Varghese and Anjana Anil in Bengaluru; Editing by Leroy Leo)

Growth woes to erode emerging market FX gains in coming months

BENGALURU/JOHANNESBURG – Emerging market currencies are poised to shed some of their recent gains over the next three months as mounting economic gloom drives investors out of riskier assets, even with the US dollar holding steady, a Reuters poll showed.

Fueled by a weaker dollar and a temporary easing in trade tensions, the broader emerging market currency index has climbed roughly 5% in 2025, marking a dramatic rebound from last year’s slump.

But that rally is likely finished as recession fears intensify with US tariff shockwaves threatening to ripple across economies, amplifying uncertainty and weighing heavily on sentiment across developing markets.

Almost all EM currencies covered in the April 30–May 6 poll of over 50 strategists are expected to give back at least part of their recent gains over the next three months, with a few projected to erase them entirely.

The broader foreign exchange poll indicated the greenback is likely to stay flat in the near term against major currencies.

“EM assets face growing risks from slowing global growth. Global growth forecasts have been revised sharply lower, and tariffs threaten to add more pain, as reflected in recent IMF forecasts,” said Mitul Kotecha, head of FX & EM macro strategy Asia at Barclays.

“We also maintain our view of gradual CNY depreciation due to the impact of tariffs, ongoing deflationary pressures, weak growth, and capital account pressures, which may act as a drag on other Asian currencies, contributing to our view of expected underperformance of Asian FX versus other EM regions.”

In a separate poll, most economists warned the global economy risks sliding into recession this year, with many citing US President Donald Trump’s tariffs as a major blow to business sentiment.

The Chinese yuan, Indian rupee, and South African rand are expected to pare gains made over the past four months and lose around 1.0%-3.0% in three months.

Expectations for the yuan to give up all its year-to-date gains likely stem from the potential expiration of the tariff reprieve in July amid ongoing growth challenges in China.

The Korean won, Thai baht, and Turkish lira are expected to weaken around 4.0% by end-July.

In the same time period the Brazilian real, which has gained more than 8% this year, is forecast to drop around 1%. The Mexican peso is predicted to fall about 2.5%.

“The hit to investor confidence coming from other spheres of US policy-making might also trigger waves of risk aversion, leaving EM FX vulnerable for the time being,” noted Anezka Christovova at J.P. Morgan.

(Reporting by Devayani Sathyan and Vuyani Nbada; Polling by Jaiganesh Mahesh, Indradip Ghosh, Veronica Khongwir, and Vijayalakshmi Srinivasan; Editing by Alexandra Hudson)

US futures bounce on China trade talks

SINGAPORE – US stock futures bounced and Asian currencies rose on Wednesday, as investors welcomed news of a meeting between top US and Chinese trade officials, set for the weekend in Switzerland, as a chance to tone down the trade war.

“My sense is this will be about de-escalation,” US Treasury Secretary Scott Bessent said on Fox News.

S&P 500 futures ESc1 rose about 0.9%, recouping what had been a fall in the cash session when US President Donald Trump had seemed to strike a more confrontational tone.

Stock markets in Japan and Australia edged higher.

The dollar rose a little bit on the yen but fell on other Asian currencies, with the offshore yuan creeping close to a six-month high and the Australian dollar at a five-month high and just above 65 US cents.

“It suggests that there is perhaps a willingness and enthusiasm on both sides to meet at a high level, so it can’t be anything but positive I would have thought,” said National Australia Bank’s head of foreign exchange research Ray Attrill.

“It’s ostensibly positive for Asian FX generally.”

Asian currencies, led by a flying Taiwan dollar, have surged on the greenback lately on speculation that a weaker dollar is part of Trump’s trade agenda and as big investors cut large dollar positions built over years of buying US assets.

Gold fell 1% and oil was about 1% higher. Benchmark 10-year Treasury yields were steady at 4.3238%.

The US Federal Reserve meets to set interest rates later on Wednesday, with expectations for cuts being dialled down.

Markets imply nearly no chance of a move on Wednesday and only a 33% chance of a cut in June, down from 64% a month ago.

The heaviest fighting in more than two decades has erupted between nuclear-armed neighbours India and Pakistan, with shelling and gunfire over the frontier in Kashmir and India striking targets inside Pakistan.

“It adds another layer to geopolitical tensions,” said NAB’s Attrill, and would likely push down on India’s rupee.

The euro EUR=EBS had support above USD 1.13 with German conservative leader Friedrich Merz elected chancellor in a second round of voting after his alliance with the Social Democrats was dealt a surprise defeat in the first attempt.

(Reporting by Tom Westbrook; Editing by Shri Navaratnam)

Gold slips on US-China trade talk hopes; traders eye Fed policy

Gold prices fell on Wednesday as optimism over potential US-China trade talks weakened demand for safe-haven assets, while investors braced for the Federal Reserve’s policy meeting later in the day.

FUNDAMENTALS

* Spot gold lost 1.3% to USD 3,386.36 an ounce as of 0024 GMT. The metal had risen nearly 3% in the previous session.

* US gold futures fell 0.8% to USD 3,395.20.

* US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s top economic official in Switzerland this week, US officials said, in what could be the first step toward resolving a trade war disrupting the global economy.

* The US and China imposed tit-for-tat tariffs on each other last month, triggering a trade war that fuelled fears of a global recession.

* On Tuesday, US President Donald Trump said he and top administration officials will review potential trade deals over the next two weeks to decide which ones to accept.

* The market’s focus will be on the Federal Open Market Committee (FOMC) meeting later in the day, where the US central bank is expected to hold interest rates steady. The Fed has held its policy rate in the 4.25%-4.50% range since last December.

* Fed Chair Jerome Powell’s remarks are awaited for clues into the potential timing of future interest rate cuts.

* Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-interest rate environment.

* Spot silver eased 0.6% to USD 33.03 an ounce, platinum fell 0.4% to USD 980.95, and palladium lost 0.5% to USD 969.75.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy)

S&P 500 futures rise on trade deal optimism

US stock futures rose late on Tuesday after it was announced that Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer would meet with China’s top economic official later this week in Switzerland.

S&P 500 and Nasdaq futures were up about 1%, signaling that traders expect Wall Street to open higher on Wednesday morning, the latest sharp move in several weeks of uncertainty related to President Donald Trump’s global trade war.

The US Trade Representative’s office and Treasury said Greer and Bessent would travel together to Geneva on May 8 and would also meet with Swiss President Karin Ketter-Sutter to discuss negotiations over reciprocal trade.

In Tuesday’s trading session on Wall Street, the S&P 500 and Nasdaq lost ground
after comments from Trump provided little clarity about the timeline for any trade deals.

Stocks have been volatile since Trump announced his first round of tariffs on April 2, with the S&P 500 initially dropping nearly 15%, only to stabilize and briefly recover to levels from before the tariffs were announced.

(Reporting by Noel Randewich; Editing by Leslie Adler)

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