Category Archives: Currencies

Inflation pain helped secure Trump win but his policies mean higher prices

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Markets expect his policy package to harm trade and growth but reduce business taxes

Higher share prices. A stronger dollar. A less rapid pace of interest rate cuts. The financial market reaction to Donald Trump’s return to the White House was swift and predictable.

The man who will become his country’s 47th president has made no secret of what he plans to do: cut taxes, impose heavy tariffs on imported goods, place curbs on migration, and slash red tape.

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Wall Street and bitcoin soar to record highs as Trump wins US election

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Dollar up and renewable energy stocks down, while shares in president-elect’s media business rise by more than a third

Wall Street and bitcoin rallied to fresh record highs and the dollar soared after Donald Trump’s victory in the US presidential election, while renewable energy stocks fell.

Trump was declared the winner on Wednesday morning after securing the 270 electoral votes needed to take the presidency.

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Shares in New York and London tumble on fears of US recession

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FTSE 100 on track for its lowest close since April and Japan’s Nikkei suffers biggest fall since crash of 1987

Shares on Wall Street and in London have fallen heavily amid a global stock market rout triggered by fears of a recession in the US.

The tech-focused Nasdaq index dropped by 6% as trading in New York opened on Monday, while the broader S&P 500 index fell by 4.2% in a sell-off triggered by weak US jobs data. The Dow Jones industrial average lost more than 1,100 points, a 2.8% decline.

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Former Lib Dem leader Vince Cable testifies at inquiry into Post Office Horizon scandal – business live

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Cable was business secretary from 2010-15 when the government privatised the Post Office

Cable has agreed with a description of Post Office management as “thugs in suits”, and had a goal of rebalancing the relationship between bosses and subpostmasters during his time in post.

He recounted a story about challenging 8 Post Office closures in his constituency, before he entered government, and being treated poorly by the organisation’s “middle management”.

Mr Bates has, I believe, described them as ‘thugs in suits’ and I recognise the description,” said Cable in his witness statement. “And [the Post Office] dealt with us in an arrogant way when we campaigned against closures.


In my first meeting with Paula Vennells [Post Office chief executive] I suggested this is what the Post Office should do,” he said. “We perhaps should have been more modest and had postmasters on the board, which would have achieved some of our aims, which I think has now happened.

Problems with Horizon barely came across my desk,” he said. “When they did it was usually in a very uncontroversial way and not drawn to my attention as an issue I should focus on. General reason is that the officials who were briefing me and ministers on the subject hadn’t seen it as a particular problem.

In hindsight, I should have been told at the outset what Horizon was,” he said. “That competent people … were suggesting there was a risk factor and I should have been told about Mr Bates and the justice group. I never heard his name until I’d been in the job five years. I wasn’t briefed on them.

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French stock market swings to gain after election surprise; Britvic agrees to improved Carlsberg offer – business live

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Live coverage of business, economics and markets after New Popular Front is largest party in second round of France’s election, with far-right third

The French election has meant that Marine Le Pen’s far-right National Rally (RN) will not be in power, but it has not settled what France’s new government will look like.

The New Popular Front (NFP), the hastily arranged coalition of left-wing parties, won the most seats, but it is far short of a parliamentary majority. The result will mean a lot of negotiation to agree on who will be the new prime minister – let alone on achieving anything meaningful in governing the country.

The French parliament is more divided than ever, made up mainly of three blocs (Left – 182 seats, Centre – 168 seats, Extreme Right – 143 seats) and a number of smaller ones. As we predicted before the elections, no bloc can claim an absolute majority.

Minority government

French political parties “are not used to making concessions in order to create a programme around a coalition with other parties”, and the NFP’s most prominent figure, Jean-Luc Mélenchon demanded its entire programme be implemented. “If political parties maintain such positions, a long period of instability will ensue,” said Ledent.

Learning to cooperate

“Excluding the 80 MPs from the far left and the 145 from the far right, there are over 350 MPs left to form a broad coalition ready to reform France, taking into account the diversity of opinions. In other European countries, including Germany, such a configuration would be quite natural and would result in a government with a clear majority.

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What’s behind the record FTSE 100 high?

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Hopes of a UK interest rate cut and easing geopolitical tensions are not the only reasons for the intraday peak reached this morning

The UK stock market has hit an intraday record high, lifted by hopes of interest rate cuts and easing geopolitical tensions, after setting a new closing high on Monday. The FTSE 100 index touched 8,076 points at the opening bell on Tuesday, surpassing a previous high of 8,047 reached in February 2023. We explain what is behind the rising London market.

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UK Libor trader Tom Hayes loses appeal against rate-rigging conviction – as it happened

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The former star UBS and Citigroup trader was convicted of conspiracy to defraud by manipulating financial benchmark and served 5 1/2 years in prison

Britain’s financial regulator has identified shortcomings in how some motor insurance firms are valuing written-off or stolen vehicles.

A review by the Financial Conduct Authority (FCA) has found evidence that suggests some firms are offering their customers less than their written-off or stolen vehicle is worth and, in some cases, are only increasing that offer when a customer complains.

Having your vehicle written off or stolen can be intensely stressful and we expect firms to offer the right support to help their customers.

We expect all motor insurers to take note of our findings and we are engaging directly with those that have issues that need to be addressed.

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Bitcoin hits new record high above $70,000; US investor ends Currys chase – business live

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Live, rolling coverage of business, economics and financial markets as exchange-traded funds help biggest cryptocurrency rally

The European Commission’s use of Microsoft email and office software broke its own privacy rules, an EU privacy watchdog has ruled.

Microsoft’s software transferred personal data outside the EU, breaching privacy rules, according to the European Data Protection Supervisor.

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Argentina’s new government devalues peso by more than 50%

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Package of spending cuts introduced in attempt to tackle country’s worst economic crisis in decades

Argentina has devalued its currency, the peso, by more than 50% as part of a package of large-scale spending cuts intended to address the country’s worst economic crisis in decades.

The plans, introduced under the newly inaugurated administration of Javier Milei, include cutting energy subsidies and cancelling tenders for public works.

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Digital pound should not be considered until risks addressed, MPs warn

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Treasury select committee highlights concerns over data privacy and increased possibility of bank runs

The idea of creating a digital pound should not even be considered until the UK government and Bank of England address concerns over data privacy and the increased risk of bank runs, a parliamentary committee has warned.

MPs on the Treasury select committee said that while it was true that the rollout of a central bank digital currency could trigger fresh innovation and competition in the payments sector, serious questions remained about whether the positive effects outweighed the risks and costs.

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Would Javier Milei’s dollar plan for Argentina be an economic experiment too far?

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President-elect’s idea is a gamble that is likely to crash an economy paying the price for mistakes of his predecessor

Javier Milei’s bigger-than-expected victory in the Argentinan presidential election suggests voters in South America’s second biggest country have willingly opted for shock treatment to sort out the country’s deep economic malaise.

It is perhaps not hard to see why 56% of the electorate backed the rightwing libertarian: Argentina may have the world’s best football team but its economy has performed disastrously in recent years. Inflation is running at 140% and a three-year drought has led to a sharp fall in agricultural production. Two out of five people live in poverty and the currency has lost 90% of its value in four years.

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Bond market sell-off sends UK long-term borrowing cost to 25-year high

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Rate tops level last seen after Liz Truss mini-budget as fears of global inflation and US political instability spook markets

Britain’s long-term cost of borrowing has hit its highest level since 1998, as political instability in the US and fears of sustained high levels of inflation triggered a sell-off in global bond markets.

The yield, or interest rate, on 30-year UK government bonds hit 5.115% early on Wednesday, according to the financial data provider Refinitiv.

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UK basic wage growth hits record high; Russia’s central bank lifts rates to 12% – as it happened

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UK regular pay growth highest since 2001 while unemployment rate rises unexpectedly; rouble recovers afters Bank of Russia raises rates at extraordinary meeting

The statement doesn’t mention the rouble, which dropped to its lowest level in nearly 17 months yesterday. The Russian currency has been boosted by the central bank’s move.

It now takes 95 roubles to buy a dollar, whereas yesterday the exchange rate was at 102 roubles per dollar at one stage.

The decision is aimed at limiting price stability risks.

Inflationary pressure is building up. As of 7 August, the annual rate of inflation rose to 4.4% while current price growth rates continue to increase. Over the last three months current price growth amounted to 7.6% on average in annualised terms on a seasonally adjusted basis. The same core inflation measure went up to 7.1%.

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Russia’s central bank hikes interest rates by 3.5 percentage points as rouble falls

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Emergency decision is intended to halt slide after currency dropped to weakest point in almost 17 months

Russia’s central bank has hiked interest rates by 3.5 percentage points in an emergency move aimed at halting the rouble’s recent slide, after it fell to its weakest point in almost 17 months.

The decision to raise the key rate from 8.5% to 12% was announced after an extraordinary meeting of the bank’s board of directors, called after the rouble plunged past the psychologically key level of 100 to the dollar on Monday morning.

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Make your prices clearer, supermarkets told; ex-banking boss says Coutts-Farage row is a ‘grey area’– business live

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CMA will launch a detailed probe into ten product areas including milk, bread, and baby formula to ensure households benefit from lower prices as cost inflation falls

On that subject, the maker of Mr Kipling cakes, Oxo cubes and Bisto gravy granules has said it believes recent food cost inflation has peaked, and it is not planning any more price rises for its food products for the rest of the year.

The news came as owner Premier Foods reported a 21% increase in sales in the first quarter of the financial year, compared with a year earlier.

Evidence to date indicates high food price inflation has not been driven by weak retail competition, but competitive pressure is important as input prices fall

Next phase of CMA probe will examine competition and prices across the supply chain for the product categories identified

Rules on unit pricing should be tightened and retailers must comply to help shoppers compare prices easily

Not everyone is able to benefit fully from strong competition, particularly those who cannot travel to large stores or shop online, and therefore may rely on higher-priced convenience stores.

Now that some input costs are starting to fall, there are some signs that grocery retailers are planning to start rebuilding their profit margins. The CMA will monitor this carefully in the months ahead, to ensure that people benefit from competitive prices as input costs fall.

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‘I’m left with nothing’: Nigerians feel brunt of economic shakeup

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President Tinubu’s policies please foreign investors, but a devalued currency and soaring petrol prices mean ‘national sacrifice mode’ is widely unpopular

Nigerians are feeling the strain as their new president pushes through a series of unpopular policies that have earned him praise from foreign investors.

Bola Tinubu, who was sworn in on 29 May, has surprised many observers by taking a running start to his tenure of Africa’s most populous country. In little over two weeks he has banished a longstanding petrol subsidy, ejected the country’s central bank governor and ended restrictions on the rate of the naira, Nigeria’s currency.

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Eurozone sinks into recession as cost of living crisis takes toll

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GDP shrank 0.1% in first quarter of 2023 and final three months of 2022 after revisions to earlier estimates

The eurozone slipped into recession in the first three months of the year, after official figures were revised to show the bloc’s economy shrank as the rising cost of living weighed on consumer spending.

Figures from Eurostat, the EU’s statistical agency, showed gross domestic product (GDP) fell by 0.1% in the first quarter of 2023 and the final three months of 2022 after revisions to earlier estimates. A technical recession is generally defined as two consecutive quarters of negative growth.

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Highest-denomination bill in Argentina is now the 2,000-peso note, worth $4

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Country unveils new banknote as currency plummets with inflation on course to 130%

Argentina’s new 2,000-peso bill, the country’s largest-denomination note, went into circulation on Monday, though due to fast depreciation of the currency it is worth only $8.50 at the official exchange rate and just over $4 in commonly used parallel markets.

The peso has shed about a quarter of its value against the dollar this year despite strict capital controls that slow its fall. Most Argentinians buy dollars in unofficial markets where they trade at over 480 pesos versus the official rate of 235.

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Man suspected of being crypto fugitive Do Kwon arrested in Montenegro

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South Korean CEO of Terraform Labs is accused of multi-billion-dollar fraud involving TerraUSD and Luna currencies

A man suspected of being the fugitive South Korean cryptocurrency entrepreneur Do Kwon, accused of orchestrating a multi-billion-dollar fraud that shook global crypto markets last year, has been arrested in Montenegro.

“Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen, co-founder and CEO of Singapore-based Terraform Labs,” the interior minister, Filip Adžić, tweeted late on Thursday.

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Jeremy Hunt tells business leaders energy support is ‘unsustainably expensive’ – as it happened

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Business groups fear government will halve energy support after March, while commuters face more disruption on the railway

Households in the UK spent £1.1bn more on groceries in December than a year earlier, taking Christmas spending to a record £12.8bn, but got fewer items in their baskets as rampant inflation hit home.

Many stocked up on alcohol to enjoy while watching the men’s football World Cup, with sales of beer reaching the highest level for the year on the day of England’s quarter-final against France on 10 December.

This was a big drop. Mortgage approvals fell by 11,800 in November, the biggest fall since April 2020 and are at their lowest level since June 2020. This is not the news the housing market was hoping for in the first week of the new year.

Mortgage approvals are the key lead indicator for housing transactions, lower mortgage approvals today means fewer housing transactions tomorrow. A reduction in housing transactions will hurt all those businesses that are involved in the home-moving process, but the absence of forced sellers implies that house prices will not fall as far or as fast as housing transactions.

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