Dollar on track for best week in a month

NEW YORK – The dollar dipped on Friday but was on track for its strongest weekly performance in a month on expectations that the US economy will continue to outperform its peers globally this year and that US interest rates will stay relatively higher.

A still solid labor market and stubbornly high inflation have lifted Treasury yields in recent weeks and boosted demand for the US currency.

New policies under the incoming Donald Trump administration, including business deregulation, tax cuts, curbs on illegal immigration, and tariffs, are also expected to boost growth and add to price pressures.

The dollar index was last down 0.28% on the day at 108.91, after hitting a two-year high of 109.54 on Thursday. It is on track for a weekly gain of 0.85%.

Despite recent dollar gains there remains considerable uncertainty over when policies will be introduced by the new US government, and what their ultimate impact will be. That could pause the dollar rally in the near-term.

“We’re likely to see a bit of a dollar pullback as the administration comes in because all these proposed tariffs – they’re going to take some time to implement and we don’t actually know if all of these proposals are going to be implemented or not,” said Helen Given, FX trader at Monex USA in Washington.

“As we move through the second half of this calendar year I think we’re going to see some more dollar strength,” Given said.

The dollar briefly pared losses after data on Friday showed that US manufacturing moved closer to recovery in December, with production rebounding and new orders rising further.

The euro faces a weaker growth outlook and may be hurt by US tariffs, with the European Central Bank expected to cut rates further than the Federal Reserve this year.

Traders are pricing in 100 basis points rate cuts by the ECB by year-end, and only a less than certain chance of 50 basis points of cuts by the Fed.

Uncertainties including the French budget battle and German elections are also weighing on the single currency.

The euro was last up 0.39% at USD 1.0305 but was headed for a 1.22% weekly decline, its worst since early-November.

Sterling gained 0.41% to USD 1.2431. It was on track to lose roughly 1.15% for the week, the most since early November.

The dollar slid 0.26% to 157.11 Japanese yen, holding just below a five-month high of 158.09, reached in December.

The Japanese currency has suffered from the wide interest rate differential between the US and Japan, with the Bank of Japan’s caution over further rate increases spelling more pain for the yen.

China’s onshore yuan hit its weakest level in over a year at 7.3199 per dollar, as falling yields and expectations of more domestic rate cuts continued to weigh on the currency.

In cryptocurrencies, bitcoin gained 1.59% to USD 98,658.

(Reporting by Karen Brettell; Additional reporting by Rae Wee and Greta Rosen Fondahn; Editing by Sonali Paul, Kim Coghill, Chizu Nomiyama, and Sandra Maler)

Gold slips from three-week high as strong dollar weighs

Gold prices retreated from a three-week high on Friday, pressured by a robust dollar, while markets braced for potential economic and trade shifts under US President-elect Donald Trump.

Spot gold eased 0.6% to USD 2,641.52 an ounce at 01:41 p.m. ET (1841 GMT), after hitting its highest level since Dec. 13 earlier in the session. Bullion is up about 0.8% for the week so far.

US gold futures settled 0.5% lower at USD 2,654.70.

The new president’s agenda that supports higher tariffs has boosted the dollar and created significant underlying pressure on metal markets, said Nitesh Shah, commodity strategist at WisdomTree.

The dollar index was set for its strongest weekly performance since mid-November, making gold pricier for overseas buyers.

“For most of the metals, the slowing of global trade has typically been coupled with a slowing economy and therefore slowing demand for metals,” Shah said, referring to the potential impact of Trump’s proposed trade tariffs.

A headwind from a stronger dollar is likely to persist for gold, but it looks like debt will continue rising in the US and other countries, and geopolitical issues aren’t going to end soon, so it should stay supported, he added.

Trump is set to take the oath of office on Jan. 20. His proposed tariffs and protectionist policies are expected to fuel inflation.

This could slow the US Federal Reserve’s interest rate cuts, limiting gold’s upside. After three rate cuts in 2024, the Fed projects only two reductions in 2025 due to persistent inflation.

Gold, which thrives in low-rate environments, is currently benefiting from seasonal demand.

“January has been consistently seeing the best price gains over the last 20 years as investors and asset allocators open fresh new long positions, coupled, of course, with good jewelry offtake for the festive season,” independent analyst Ross Norman said.

Spot silver rose 0.2% to USD 29.63 per ounce, platinum added 1.9% to USD 940.80, and palladium gained 1.7% to USD 926.51.

(Reporting by Sherin Elizabeth Varghese and Anjana Anil in Bengaluru; Editing by Shreya Biswas and Mohammed Safi Shamsi)

Gold climbs to over two-week high on safe-haven demand; Trump’s policies in focus

Gold hit a more than two-week high on Thursday, fuelled by safe-haven buying, while the market took out positions ahead of the Federal Reserve’s rate outlook and the potential impact of President-elect Donald Trump’s proposed trade tariffs.

Spot gold rose 1.2% to USD 2,654.24 an ounce by 02:57 p.m. EST (1957 GMT), hitting its highest since Dec. 16. US gold futures settled 1.1% higher at USD 2,669.

“I can’t see anything market-moving in the news, but geopolitical forces (international tensions as well as financial uncertainties, not less ahead of the inauguration of President-elect Trump) are supportive,” said StoneX analyst Rhona O’Connell in an email.

Bullion thrives in low-interest-rate environments and acts as a hedge against economic and geopolitical risks.

Russia launched a drone strike on Kyiv early on Wednesday, causing damage in at least two districts, while the Israeli military struck a suburb of Gaza City.

Traders await next week’s US job openings data, the ADP employment report, the Fed’s December FOMC meeting minutes, and the US employment report to gauge the interest-rate outlook for 2025.

In 2024, rate cuts, central-bank buying, and geopolitical tensions drove gold to record highs with an over 27% annual gain, its biggest since 2010.

“Corrections or consolidations in the early part of the year could set the stage for a renewed rally,” Fawad Razaqzada, market analyst at Forex.com said, adding that a gold-price target of USD 3,000 an ounce was feasible.

“The unwinding of the ‘Trump trade’ – a phenomenon characterized by a strong US dollar and robust equity markets – could weaken the dollar and bolster gold prices.”

Trump’s inauguration on Jan. 20 has heightened uncertainty, with his proposed tariffs and protectionist policies expected to be inflationary and potentially spark trade wars.

Among other metals, spot silver rose 1.9% to USD 29.43 an ounce, palladium was steady at USD 910.64 and platinum climbed 1.9% at USD 920.72.

(Reporting by Sherin Elizabeth Varghese and Anjana Anil in Bengaluru; editing by Barbara Lewis, Rod Nickel, and Mohammed Safi Shamsi)

Nvidia’s market value gets USD 2 trillion boost in 2024 on AI rally

Nvidia emerged as the biggest global gainer in market capitalization for 2024, driven by surging interest in artificial intelligence and the robust demand for its AI-centric chips across various industries.

The chipmaker’s market value increased by over USD 2 trillion last year, reaching USD 3.28 trillion at the close of 2024, making it the second-most valuable listed company in the world. Its market value was USD 1.2 trillion at the end of 2023.

Meanwhile, Apple continued to lead global companies in market value, nearing a historic USD 4 trillion valuation. This surge was fuelled by investor enthusiasm for the company’s anticipated AI enhancements, aimed at revitalizing sluggish iPhone sales.

At the end of 2024, Microsoft ranked third with a market value of USD 3.1 trillion, followed by Alphabet Inc. and Amazon, each valued at approximately USD 2.3 trillion.

These tech companies significantly boosted their respective global indexes in 2024, with the S&P 500 index surging 23.3% and the Nasdaq climbing 28.6%.

Despite the shares’ higher valuations, looming US-China tariff tensions, and potentially slower US interest rate cuts, analysts remain optimistic about the sustained strong performance by tech firms in 2025.

Daniel Ives of Wedbush predicts a 25% gain in tech stocks in 2025, attributing potential growth to a less regulatory environment under Donald Trump, forthcoming strong AI initiatives, and a stable foundation for Big Tech and Tesla in 2025 and beyond.

“We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and USD 2 trillion+ of incremental AI cap-ex over the next 3 years,” he said.

(Reporting By Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru; Editing by Mrigank Dhaniwala)

Dollar at two-year high on growth outlook, euro tumbles

NEW YORK – The US dollar jumped to a two-year high on Thursday in the first day of 2025 trading, building on last year’s strong gains on expectations US growth will beat peers and keep US interest rates relatively elevated.

The Federal Reserve has indicated that it will be more cautious in cutting interest rates as inflation remains stubbornly above its 2% annual target and the economy remains strong.

Policies by US President-elect Donald Trump are also expected to boost growth and potentially add to upward price pressures.

“In terms of 2025 economic growth, there’s no rival to the dollar,” said Adam Button, chief currency analyst at ForexLive in Toronto.

“Capital flows dominate the turn of the year and the US stock market has really put to shame every other global market,” Button added. “The dollar is the only game in town until there is a genuine stumble in the US economy.”

Data on Thursday confirmed a still solid jobs market. The number of Americans filing new applications for unemployment benefits dropped to an eight-month low last week, pointing to low layoffs at the end of 2024.

The dollar index was last up 0.77% on the day at 109.38.

The euro dropped 1.01% to USD 1.025, its lowest since November 2022.

The single currency accelerated losses after it broke below the USD 1.03 level, indicating that technical factors were deepening the sell-off.

Traders anticipate deep interest rate cuts from the European Central Bank in 2025, with markets pricing in at least four 25-basis-point cuts, while not being certain of even two such moves from the Fed.

ECB policymaker Yannis Stournaras said on Thursday he expected the bank’s main interest rate to be cut to 2% by the autumn, from 3% currently.

Sterling, which held better than most major currencies against the greenback last year, fell 1.19% to USD 1.2368, its lowest since April. Its fall accelerated after it broke through resistance around USD 1.2475.

The dollar gained 0.47% to 157.61 Japanese yen.

It reached a five-month high above 158.09 yen in late December, potentially putting pressure on the Bank of Japan, which is expected to raise interest rates early this year, but perhaps not imminently.

China’s yuan languished at 14-month lows as worries about the health of the world’s second-biggest economy, the prospect of US import tariffs from the Trump administration, and sliding local yields weighed on investor sentiment.

In cryptocurrencies, bitcoin rose 2.77% to USD 97,404.93.

(Reporting by Karen Brettell; Additional reporting by Ankur Banerjee and Alun John; Editing by Christopher Cushing, Angus MacSwan, Susan Fenton, Andrew Heavens, and Richard Chang)

Oil prices settle up on China optimism as investors return from holiday

NEW YORK – Oil prices settled up by more than USD 1 a barrel on Thursday as investors returned for the first trading day of 2025 with an optimistic eye on China’s economy and fuel demand after a pledge by President Xi Jinping to promote growth.

Swelling gasoline and distillate inventories in the US pressured prices and capped gains.

Brent crude futures settled at USD 75.93 a barrel, up USD 1.29, or 1.7%. US West Texas Intermediate crude settled at USD 73.13 a barrel, up USD 1.41 or 2%.

Xi said in his New Year’s address on Tuesday that China would implement more proactive policies to promote growth in 2025.

China’s factory activity grew more slowly than expected in December, a Caixin/S&P Global survey showed on Thursday, amid concerns about tariffs proposed by US President-elect Donald Trump. Some analysts view weaker Chinese data as positive for oil prices because Beijing could be encouraged to accelerate stimulus.

An official survey released on Tuesday showed China’s manufacturing activity barely grew in December. Services and construction fared better, with the data suggesting policy stimulus is trickling into some sectors.

US oil stocks data from the Energy Information Administration released on Thursday, a day later than normal due to the New Year holiday, showed gasoline and distillate inventories jumped last week.

US gasoline stocks rose by 7.7 million barrels in the week to 231.4 million barrels. Distillate stockpiles, which include diesel and heating oil, increased by 6.4 million barrels in the week to 122.9 million barrels.

“The negative portion of the release was in the large product stock builds,” said Jim Ritterbusch of Ritterbusch and Associates in Florida, which he said were attributable to an unexpected drop in demand.

Crude stockpiles fell less than expected, decreasing by 1.2 million barrels to 415.6 million barrels last week compared with analysts’ expectations in a Reuters poll for a 2.8-million-barrel draw.

Traders kicking off the new year also are probably weighing higher geopolitical risks and Trump’s efforts to run the US economy hot against the expected drag from proposed tariffs, said IG market analyst Tony Sycamore.

“Tomorrow’s US ISM manufacturing release will be key to crude oil’s next move,” Sycamore said.

Sycamore said WTI’s weekly chart is winding itself into a tighter range, suggesting that a big move is coming.

“Rather than trying to predict in which way the break will occur, we would be inclined to wait for the break and then go with it,” he added.

Oil prices are likely to be constrained near USD 70 a barrel in 2025, down for a third year after a 3% decline in 2024, with weak Chinese demand and rising global supplies offsetting OPEC+ efforts to shore up the market, a Reuters poll showed.

In Europe, Russia halted gas pipeline exports through Ukraine on New Year’s Day after the transit agreement expired on Dec. 31. The European Union has arranged alternative supply ahead of the widely expected stoppage while Hungary will keep receiving Russian gas via the TurkStream pipeline under the Black Sea.

(Additional reporting by Anna Hirtenstein, Florence Tan in Singapore, Colleen Howe in Beijing, and Paul Carsten in London; Editing by David Goodman, Frances Kerry, Rod Nickel, Andrea Ricci, and David Gregorio)

Oil prices ease as markets weigh China stimulus hopes

NEW YORK – Oil edged lower on Thursday in light holiday trade as the dollar’s strength offset hopes for additional fiscal stimulus in China, the world’s biggest oil importer.

Brent crude futures settled down 32 cents, or 0.43%, at USD 73.26 a barrel. US West Texas Intermediate crude closed at USD 69.62, down 0.68%, or 48 cents, from Tuesday’s pre-Christmas settlement.

Chinese authorities have agreed to issue 3 trillion yuan (USD 411 billion) worth of special treasury bonds next year, Reuters reported on Tuesday, citing two sources, as Beijing ramps up fiscal stimulus to revive a faltering economy.

“Injecting a stimulus into a nation’s economy creates increased demand, and increased demand pushes prices higher,” said Tim Snyder, chief economist at Matador Economics.

The World Bank on Thursday raised its forecast for China’s economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would keep weighing it down next year.

The US dollar continued to edge up higher after hitting a milestone last week. A stronger dollar makes oil more expensive for holders of other currencies.

The latest weekly report on US inventories, from the American Petroleum Institute industry group, showed crude stocks fell last week by 3.2 million barrels, market sources said on Tuesday.

Traders will be waiting to see if the official inventory report from the Energy Information Administration confirms the decline. The EIA data is due at 1 p.m. EST (1800 GMT) on Friday, later than normal because of the Christmas holiday.

Analysts in a Reuters poll expect crude inventories to have fallen by about 1.9 million barrels in the week to Dec. 20, while gasoline and distillate inventories are seen falling by 1.1 million barrels and 0.3 million barrels respectively.

Elsewhere, southbound traffic in Turkey’s Bosphorus Strait was set to resume on Thursday, having been halted earlier in the day after a tanker suffered an engine failure, shipping agent Tribeca said.

(Additional reporting by Alex Lawler in London, Yuka Obayashi in Tokyo, and Emily Chow in Singapore; Editing by Alexandra Hudson, Louise Heavens, and Richard Chang)

Gold rises on safety demand as markets look to 2025 in holiday lull

Gold prices rose on Thursday, driven by safe-haven demand in light trading after the Christmas holiday, as markets awaited signals on the US economy under the incoming Trump administration and the Federal Reserve’s interest rate strategy for 2025.

Spot gold rose 0.9% to USD 2,635.29 per ounce, as of 01:47 p.m. ET (1847 GMT). US gold futures settled 0.7% higher at USD 2,653.90.

“Some of gold’s gains had to do with what’s going on in Ukraine with Russia hitting Ukraine’s electrical system,” said Daniel Pavilonis, senior market strategist at RJO Futures.

President Joe Biden said on Wednesday he asked the US Defense Department to continue its surge of weapons deliveries to Ukraine after condemning Russia’s Christmas Day attack against some of Ukraine’s cities and its energy system.

“Gold will still be purchased by central banks, and as inflation continues, you may see increased demand for gold on the retail side as well,” Pavilonis said, adding that prices are expected to break USD 3,000 next year.

Gold is considered a hedge against geopolitical turmoil and inflation, but higher rates reduce the appeal of holding the non-yielding asset. The yellow metal has gained 28% so far this year and scored an all-time peak of USD 2,790.15 on Oct. 31.

Next year will be very volatile for bullion, with first-half gains on heightened geopolitical tensions and profit-taking in the second half, said Ajay Kedia, director at Kedia Commodities, Mumbai.

As Donald Trump prepares to return to the White House in January, markets will be closely monitoring US economic data to gauge how the Fed will navigate inflationary pressures anticipated from his administration’s policies, including tariffs, deregulation and tax reforms.

After aggressively cutting rates in September and November, the Fed persisted with easing in December but hinted at fewer reductions in 2025.

Spot silver rose 0.4% to USD 29.72 per ounce, platinum fell 0.9% to USD 935.25 and palladium shed 3% to USD 925.08.

(Reporting by Sherin Elizabeth Varghese, Anushree Mukherjee, and Anjana Anil in Bengaluru; Additional reporting by Swati Verma; Editing by Alistair Bell, Richard Chang, and Mohammed Safi Shamsi)

Dollar gains on yen on bets of US growth, inflation

NEW YORK – The US dollar hit a five-month high against the Japanese yen on Thursday on expectations the greenback would be boosted next year by policies by the incoming Donald Trump administration that are expected to boost growth and lift inflation.

Trading volumes were light on Thursday with many traders on holiday after Wednesday’s Christmas holiday and before next week’s New Year holiday.

Looser business regulations and tax cuts are expected to help propel US growth next year while analysts say that a clamp-down on illegal immigration and the prospect of new tariffs on trading partners could increase price pressures, and weigh on the economy longer term.

That has boosted the dollar against its peers, though there remains a lot of uncertainty over exactly what policies will be introduced and what their impact will be.

Rising doubts over how many interest rate cuts the Federal Reserve will be able to undertake next year has added to the dollar rally in the past few weeks.

The US central bank last week cut rates by 25 basis points as expected and Fed Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation.

Fed policymakers raised their inflation projections for 2025 and cut their interest rate forecast to 50 basis points for the year, from 100 basis points.

Money market traders are currently pricing in 38 basis points of cuts next year, implying they see a roughly 50% chance that the Fed will make a second 25 basis point reduction.

Data on Thursday showed that the number of Americans filing new applications for jobless benefits dipped to the lowest in a month last week, consistent with a cooling but still-healthy US labor market.

US retail sales also rose 3.8% between Nov. 1 and Dec. 24, as intense promotion to drum up sales in what was expected to be a highly competitive holiday season for retailers prompted last-minute shopping among consumers.

The dollar index was last up 0.02% at 108.13. It is holding just below a two-year high of 108.54 reached on Friday.

The euro rose 0.13% to USD 1.0418. The single currency fell to USD 1.03435 on Friday, the lowest since Nov. 22.

The greenback gained 0.35% to 157.93 Japanese yen and earlier reached 158.09, the highest since July 17.

The Japanese yen has suffered from the wide interest rate differential between the United States and Japan.

The Bank of Japan expects the economy to move closer to sustainably achieving the central bank’s 2% inflation target next year, Governor Kazuo Ueda said on Wednesday, suggesting the timing of its next interest rate increase was nearing.

In cryptocurrencies, bitcoin fell 2.88% to USD 95,598.

(Reporting by Karen Brettell; Editing by Alistair Bell and Chizu Nomiyama)

Yields gyrate in quiet holiday trade, pressured after 7-year sale

NEW YORK – The yield on the benchmark US Treasury note pared earlier gains on Thursday following a strong seven-year note auction, after earlier rising to an eight-month high in thin holiday trading in spite of weekly data showing a solid employment picture that should allow the Federal Reserve to adopt a less dovish stance in 2025.

Claims for unemployment insurance were 219,000 in the latest week, less than the previous period’s 220,000 and economists’ forecasts for 224,000.

The main event of the day was the seven-year note auction, which saw solid demand for the more than USD 44 billion sold, with high yield accepted of 4.532% about 2 basis points lower than where the when issued was trading around the close of bidding. The bid-to-cover ratio of 2.76 was the highest since 2.76 in March 2020.

Yields on the seven-year note fell following the auction and were last at 4.518%.

The 10-year yield following the auction was flat from its level late on Tuesday, before the Christmas holiday, at 4.588%. It earlier hit 4.641%, the highest level since May 2. The yield on the 30-year bond was just 0.5 basis points higher at 4.765%.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up just 0.4 basis points to 4.334, after earlier reaching 4.367%.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 24.3 basis points, marginally flatter than Tuesday’s late spread at +24.8 bp.

Based on the fed funds futures term structure, traders see minimal chance that the Fed will ease at its January meeting, after delivering a quarter point cut earlier this month. That brought the fed funds target to 4.25%-4.50% and was its third since it became more accommodative in September, after leaving its target rate at 5.25% to 5.50% since July 2023.

Fed officials cite strong employment, solid growth, and slow progress in lowering inflation to its 2% target as possible reasons to let up on the easing. So, markets are pricing accordingly.

In fact the 10-year TIPS breakeven rate was last at 2.352%, indicating the market sees inflation averaging just under 2.4% a year for the next decade. The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.402%

According to LSEG data, traders don’t see another interest rate reduction until May and see a less than 50/50 chance of another 25 basis points from there by year-end.

(Reporting by Matt Tracy; Editing by Chizu Nomiyama)

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