Latest news with #geopoliticalRisks
Reuters
a day ago
- Business
- Reuters
Global investment decline may worsen due to tariffs, UN trade agency warns
GENEVA, June 19 (Reuters) - Global foreign direct investment fell for the second consecutive year in 2024, with fears this year could be even worse as trade tensions rock investor confidence, the United Nations agency for trade and development said in a report published on Thursday. Foreign Direct Investment transactions, which do not include several European conduit economies, declined by 11%, indicating a significant reduction in actual productive investment activity, according to UNCTAD. Geopolitical tensions and trade fragmentation contributed to lower investment last year as they created uncertainty, which UNCTAD Secretary-General Rebeca Grynspan described as a "poison" for investor confidence. "We are even more worried about the picture in already feel that investment is are affecting growth," Grynspan told Reuters, with short-term risk management being prioritised over long-term investment. UNCTAD said its outlook for international investment in 2025 was negative due to trade tensions. Early data for the first quarter of 2025 shows record low deal and project activity. When several European conduit economies - which act as intermediary hubs where investments temporarily pass through before reaching their final destinations - are included, the data showed that FDI increased by 4% to $1.5 trillion. However, UNCTAD noted that this figure masks the reality that much of this investment is merely passing through these jurisdictions and was not productive. "We see a very worrying that has a real impact on jobs and infrastructure is going down," she said. Developed economies suffered a sharp drop in investment, with a 58% decrease in Europe. North America, however, observed a 23% increase in FDI, led by the U.S., while countries in Southeast Asia reached the second-highest level of FDI on record with a 10% rise, representing $225 billion. Though capital inflows in developing countries were broadly stable, UNCTAD observed that capital was not being injected into crucial job-creating sectors such as infrastructure, energy and technology.
Yahoo
3 days ago
- Business
- Yahoo
US Dollar: Can Rising Geopolitical Tensions Spark a Trend Reversal?
US dollar holds near 98 amid geopolitical risks and a cautious Fed outlook. Markets watch Fed projections, energy prices, and G7 signals for the dollar's next move. Technical indicators show weakness; a break below 97.65 may deepen the downtrend further. Looking for actionable trade ideas to navigate the current market volatility? Subscribe here to unlock access to InvestingPro's AI-selected stock winners. US Dollar started the week on a weak note but has been trying to stay near the 98 level since last week. There has been some buying just below 98, but it has not been strong. Rising geopolitical tensions and a sudden jump in oil prices are driving safe-haven demand and raising concerns about supply shocks. The main focus is on the increasing attacks on energy infrastructure between Israel and Iran. This conflict could impact not just the Middle East but global demand for the dollar as well. Iran's threat to close the Strait of Hormuz puts about one-third of global oil trade at risk. This could push inflation higher again, which is worrying for markets. If inflation rises, the chances of the Federal Reserve cutting interest rates in the near future may drop. Higher energy prices could make it harder for the Fed to meet its goal of price stability, leading policymakers to wait longer before making any changes. Interest rates are expected to stay the same at the Fed meeting on Wednesday. However, the key focus will be on the Fed's updated economic projections and the wording in its statement. The main question for the dollar is whether the Fed will signal any rate cuts before the end of the year. Weak employment and growth data from the US have led markets to expect a possible rate cut in September or December. But rising geopolitical tensions and the recent increase in energy prices have slightly delayed these expectations. As a result, markets now see almost no chance of a rate cut in July. This week's manufacturing data, retail sales, and unemployment claims will be closely watched. These reports may influence the Fed's tone. If the data is stronger than expected, it could lead to more strength for the dollar. Although geopolitical risks are giving the US dollar some short-term support, the overall outlook for the dollar remains weak. The US Dollar has fallen more than 10% from the 110 level seen earlier this year, and it keeps losing value, especially against EUR/USD and the currencies of commodity-exporting countries. To be sure, the euro has gained strongly due to the European Central Bank's cautious approach to cutting interest rates. Meanwhile, currencies like the USD/NOK have benefited from higher energy prices. At the same time, President Trump's expansionary fiscal policies, tax cuts, and possible new tariffs could worsen structural issues in the US economy and hurt confidence in the dollar. This may increase the risk of a larger external deficit and raise questions about the dollar's status as the world's reserve currency. In summary, while the dollar gets some short-term support from geopolitical risks and the Fed's cautious approach, key indicators still suggest a fragile outlook. The US dollar is trading around a critical support and resistance level near 98. If it manages to stay above this level, a short-term rebound may happen. However, in the longer term, the dollar is likely to remain under pressure due to trade imbalances and expectations of rate cuts. Investors will watch not only the Fed's decision but also developments in energy prices and geopolitical signals from the G7 Summit. In this period of weak global risk appetite, the dollar's direction will depend both on US policy and political risks around the world. The US dollar is still struggling to hold a key support level as its downward trend continues from earlier this year. Based on the recent upward move, the index has now reached the Fibonacci 1.272 level at 97.65. This zone can be seen as an expansion point in the trend. If the US dollar closes below 97.65 on a daily basis, the decline may continue towards 96.25 and then 94.25. However, if support at 97.65 holds, the 99.65 level could become important for any short-term rebound. A move above this resistance might signal rising dollar demand, with the potential to push the index toward the 100-102 range. Still, technical indicators are showing weakness in dollar demand for now. As long as the index stays below 99, the risk of further declines remains. *** Be sure to check out InvestingPro to stay in sync with the market trend and what it means for your trading. Whether you're a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market AI: AI-selected stock winners with a proven track record. InvestingPro Fair Value: Instantly find out if a stock is underpriced or overvalued. Advanced Stock Screener: Search for the best stocks based on hundreds of selected filters and criteria. Top Ideas: See what stocks billionaire investors such as Warren Buffett, Michael Burry, and George Soros are article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services. Related articles US Dollar: Can Rising Geopolitical Tensions Spark a Trend Reversal? USD/JPY Wavers Near Major Support, BoJ's Potential Rate Hold Could Spur Volatility EUR/USD Bullish Surge May Lose Steam If ECB Signals More Rate Cuts Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Citi sees gold below $3,000 after Q3 2025 on weak demand, growth optimism
(Reuters) -Citi lowered its short-term and long-term price targets for gold, projecting prices could drop below $3,000 per ounce by late 2025 or early 2026, driven by declining investment demand and an improving global growth outlook, the bank said in a note dated Monday. The bank revised its 0-3 month and 6-12 month gold price targets to $3,300 per ounce from $3,500 and $2,800 per ounce from $3,000, respectively. Gold prices are expected to continue consolidating between $3,100-$3,500 per ounce in the third quarter in the bank's base case, supported by geopolitical risks, potential U.S. tariff policy changes, and U.S. budget concerns, before a downward trend begins, Citi noted. "We see investment demand for gold abating in late 2025 and 2026, as ultimately, we see the President Trump popularity and US growth 'put' kicking in, especially as the US mid-terms come into focus," Citi said in a note. Gold could return to around $2,500-$2,700/oz by the second half of 2026, the bank said. In Citi's bullish case scenario, gold prices could exceed $3,500/oz in the third quarter on stronger hedging and investment demand amid U.S. economic and geopolitical tensions. While in bank's bearish case prices could fall below $3,000/oz as tariff disputes are resolved, geopolitical risks ease, and the U.S. economy avoids a hard landing, though emerging market central bank buying could keep prices elevated. However, Citi assigned only 20% probability to their bullish and bearish case each. In contrast to gold's cautious outlook, Citi forecast silver prices to rise to $40 per ounce over the next 6-12 months, driven by tightening availability and robust demand. Silver could potentially reach $46 per ounce by the third quarter of 2025 in a bullish scenario, bolstered by a quicker resolution to the U.S.-China trade war and hawkish Federal Reserve policy, the bank added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Arab News
4 days ago
- Automotive
- Arab News
World oil demand to keep growing this decade despite 2027 China peak, IEA says
LONDON: Global oil demand will keep growing until around the end of this decade despite peaking in top importer China in 2027, as cheaper gasoline and slower electric vehicle adoption in the United States support oil use, the International Energy Agency said on Tuesday. The IEA, which advises industrialized countries, did not change its prediction that demand will peak this decade, a view that sharply contrasts with that of producer group the Organization of the Petroleum Exporting Countries, which says consumption will keep growing and has not forecast a peak. Oil demand will peak at 105.6 million barrels per day (bpd) by 2029 and then fall slightly in 2030, a table in the Paris-based IEA's annual report shows. At the same time, global production capacity is forecast to rise by more than 5 million bpd to 114.7 million bpd by 2030. A conflict between Israel and Iran has highlighted the risk to Middle East supplies, helping send oil prices up 5 percent to above $74 a barrel on Friday. Still, the latest forecasts suggest ample supplies through 2030 if there are no major disruptions, the IEA said. 'Based on the fundamentals, oil markets look set to be well-supplied in the years ahead,' said IEA Executive Director Fatih Birol in a statement. 'But recent events sharply highlight the significant geopolitical risks to oil supply security,' Birol said. After decades of leading global oil demand growth, China's contribution is sputtering as it faces economic challenges as well as making a big shift to EVs. The world's second-largest economy is set to see its oil consumption peak in 2027, following a surge in EV sales and the deployment of high-speed rail and trucks running on natural gas, the IEA said. In February, it predicted China's demand for road and air transport fuels may have already peaked. China's total oil consumption in 2030 is now set to be only marginally higher than in 2024, the IEA said, compared with growth of around 1 million bpd forecast in last year's report. By contrast, lower gasoline prices and slower EV adoption in the United States, the world's largest oil consumer, have boosted the 2030 oil demand forecast by 1.1 million bpd compared with the previous prediction, the IEA said. Since returning to office, US President Donald Trump has demanded OPEC lower oil prices and taken aim at EVs through steps such as signing resolutions approved by lawmakers barring California's EV sales mandates.
Free Malaysia Today
5 days ago
- Business
- Free Malaysia Today
Ringgit rises against dollar, Asean peers on geopolitical risks
KUALA LUMPUR : The ringgit opened higher against the US dollar and a basket of currencies, including Asean currencies today, amid cautious sentiment due to escalating geopolitical risks, said an analyst. At 8am, the local note rose to 4.2365/4.2600 versus the greenback from Friday's close of 4.2435/4.2480. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the market was affected by the Israel-Iran military conflict over the weekend. 'Risks of the conflict expanded in scope which underminded US military bases and assets in the Middle East region. Its going to be a risk-off mode in the currencies market,' he noted. He said the main worry now is how the conflict would translate into higher oil prices, as the Brent crude oil is hovering around US$75.67 per barrel after it briefly touched US$78.32 per barrel at the start of the trade. 'Judging from the prevailing oil price condition, it appears the risk-off mode has yet to result in significantly higher crude oil prices,' he added. At the opening, the ringgit traded higher against a basket of major currencies. It rose versus the Japanese yen to 2.9300/2.9467 from 2.9448/2.9482 at Friday's close, stengthened against the British pound to 5.7379/5.7697 from 5.7482/5.7543 and increased vis-à-vis the euro to 4.8872/4.9143 from 4.8906/4.8958 previously. The ringgit also rose higher versus its Asean counterparts. It inched up against the Singapore dollar to 3.3020/3.3206 from 3.3077/3.3118 at Friday's close, improved versus the Thai baht to 13.0310/13.1101 from 13.0807/13.1018, appreciated vis-a-vis the Indonesian rupiah to 259.8/261.4 from 260.2/260.6 and gained against the Philippine peso to 7.54/7.59 from 7.55/7.56.
